IBM Power Breakfast May 2017 Iva Salamunovic SEE SW Renewals Team Leader 1

Software Subscription and Support (S&S) Agenda IBM S&S benefits S&S Timeline Renewal Value Incentive Pricing Objections Partial renewals 2 2

IBM Software Subscription and Support Features and benefits at a glance IBM Software Subscription Access new technology via software enhancements Gain the flexibility to update or upgrade on your schedule Get rapid access to new releases, fixes and updates Receive electronic notifications IBM Technical Support Take advantage of rapid response for severity 1 issue resolution Access live person support in 140 languages to help with deployments, migrations and code questions Access global coverage and 24x7 software technical support Leverage online support and tools While the software subscription gives a download access to a newer version, our customers can leverage IBM support to understand how to upgrade. It gives customers the ability to get the new releases of our products, take their current applications, make sure that they are secure in today's environment and get the innovation that IBM is putting in the product, which provides them benefits like better performance, better security, better ease of use, lower cost to maintain and run their applications. ibm.com/software/subscriptionandsupport 3 3 3 3

>4,000 #1 USD6B+ USD3B+ IBM invests in your success Help maximize your software investments with IBM Software Subscription and Support USD6B+ #1 in R&D investments annually in patents each of the past 22 years >4,000 USD3B+ IBM invests an incredible amount in research and development. On an annual basis, it's over $6 billion. 20 years of patent leadership…..led the way …..continue to do this in CAMS Space – Cloud, Analytics, Mobile, Security …..see this in Acquisitions Continue to lead in Patent awards of IBM support experts worldwide invested annually in software development through >35,000 developers That investment is rolled right back into your software in the form of: Updates, enhancements and fixes Improving current technologies – in anticipation of new ways of computing Addressing rapidly changing IT needs in solution areas as diverse as Cloud computing, social, mobile, data management, storage, security and analytics 4 4 4

Software Subscription & Support A BOLD way to protect and grow your install revenue S&S Renewal is a reason to revisit your client Strengthen customer loyalty Provides up-sell and cross-sell opportunity Uncover services opportunities It allows you to grow your installed base Understand your client’s technology plans On time renewal = better earnings (RVI)

Start the renewal process early Channel renewal timeline 180 days 6 mths before renewal Contact your top priority clients Confirm budgets, projects, license requirements and issues Sometimes more 180 days 115 days before renewal Log on to Passport Advantage Online, and download your renewal quote Forecast with IBM S&S Rep 45-60 days before renewal Reminder emails from IBM, 45 and 60 days before renewal Forecast with IBM S&S Rep 30 days before renewal IBM VAD & BP send reminder emails Forecast with IBM S&S Rep *** Discuss higher pricing Re-instatement *** 4–5 days before renewal Inform clients less than a week to renew Grace period extension approval will be an exception *****Cancellation letter **** 15 days before renewal IBM sends another reminder VAD and BP working with client Forecast with IBM S&S Regions following this process have the best renewal rates. Stage 1 - 180 days out We ask that you start contacting your TOP customers early to uncover Any issues in renewing and to confirm your customers intend to Renew on time. At this stage discuss with your customers the Possible reinstatement of old licenses and offer your services For upgrades, updates etc and ask if there are other opptys you Could be working on with your customers. Stage 2 - 85 days out – FORECASTING STARTS (with your VAD) Ask your VADs for renewal quotes or go to Passport Advantage On-line and download your customers who have renewals due Stage 3 – 45-60 days out – FORECAST (with your VAD) IBM Starts sending reminder email to customers in order to renew. Stage 4 - 30 days out – FORECAST (with your VAD) REMIND your customers of the renewal that’s due and again check And confirm there are no issues with renewing on time (send a letter I’ve attached later in preso the details of what IBM sends out) Stage 4 - 15 days out – FORECAST (with your VAD) 2nd Reminder goes out from IBM and the BP should do the same Last stage 5 – 4-5 days out - FORECAST (with your VAD) * Let IBM rep and VAD know if you are going to need a support extension letter or A GPE, start this process early and give your IBM rep & VAD a clear message On where the oppty is at. Please note that grace period extension will be granted only on exception basis. If this is NOT done Auto Renewal will take place. ** ideal world is to get to a point where almost all of your S&S deals are done on Time and you have less work to do and the costs are less if you’re not doing GPE’s And support extension letters. 6 6 6 6 6

Visit the Software Subscription and Support resource center Find ready-to-use presentations to share with prospects and clients Access Replays of S&S Conference Calls on Key Topics ibm.com/partnerworld/wps/servlet/ContentHandler/swg_com_sfw_isss 7 7

IBM Business Partners – not for external use S&S Pricing Model - Price of the Renewal is List Price - Clients new license discount carried to S&S - Small yty uplift V discounting so clients can deploy, recoup initial license cost - Standard uplift so client can budget yty (10%) IBM Business Partners – not for external use

What is Renewal Value Incentive? A rebate-based incentive offering for Business Partners (BPs) to reward for reselling IBM Passport Advantage Software Subscription & Support (S&S) where the new license was originally sold with value ( since January 2008) Benefits of RVI: Nurture ongoing customer relationships Increase profit opportunities Increase and win S&S (renewals) sales Criteria for program approval: Be a member of PartnerWorld Be an authorized Value Added Reseller in Software Value Plus (SVP) for the Product Group(s) of the S&S products in the order Participate in one or more IBM value programs: IBM Software Value Incentive (SVI), and/or Value Advantage Plus (standard or Government), and/or Capability / Industry Solutions Incåentive Received a value add incentive for the New License associated with the renewal through one or more of the above IBM value programs Demonstrate ongoing customer engagement and sales value add associated with the renewal Place the renewal order before the anniversary date To keep the rebate: Meet the RVI program compliance criteria 9

Partial renewals Helps clients meet software compliance regulations and demonstrates good business practices Provides baseline inventory for better asset management Helps identify deployments Enables more effective procurement and contract negotiations Provides future S&S savings on unused licenses Enhances your clients’ understanding of IBM’s software licensing terms and conditions It’s the right thing to do We’re responsible for protecting IBM’s intellectual property Returning shareholder value enables future investments in research and development 10 10 10

Partial renewals PA Terms - Recap Focus currently only on Passport Advantage non ELA and Passport Express Based on the New PA 9 contact terms : .http://www-01.ibm.com/software/passportadvantage/pa_agreements.html “If Client requests to renew expiring IBM Software Subscription and Support at a lesser quantity of IBM Program uses and installations than the expiring quantity, Client must provide a report that verifies current IBM Program usage and installation, and may be required to provide other compliance verification information.” A ‘partial renewal’ is understood to be a request by the customer to renew a lesser quantity on a line item on a renewal that is due. As opposed to not renewing an item fully. For example 100 quantity is due but customer requests to renew only 50. 11 11 11

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