NASA/IBM Partnership Milestones IBM Helps design and build the Automatic Sequence Controlled Calculator for Harvard University. IBM technology supports flights of the Space Shuttles Columbia, Challenger, Discovery, Atlantis and Endeavour. Astronaut John Glenn four-hour, three-orbit flight is monitored in real-time by IBM computers. computers assist flight controllers in the rescue of the Apollo 13. IBM ThinkPad 750C first notebook in space NASA’s Pathfinder, equipped with IBM RS/6000 lands on Mars. IBM software develop the software and systems that will operate the James Webb Space Telescope.

3 Our world is becoming smarter Instrumented Interconnected Intelligent

4 IBM Research 94% CIOs spend an impressive 55 % of their time on activities that spur innovation Of CIOs say it is imperative to integrate Business and Technology to innovate 78% Percentage of CIOs who want to improve the way they use and manage their data 78% of CEOs put more focus on insight and intelligence of information to realize their strategy. 69% Of CEOs will achieve better business results through more collaboration and information sharing 60% Of CEO’s agree IT complexity will continue to rise

5 The real value arrives when the software capabilities are delivered in an industry context through IBM Industry Frameworks Supply chain Marketing and customer management IT systems and operations Merchandising and product management Store and channels Business and finance administration Accelerate solution design Retail-specific assets Reduce project risk Reusable implementation patterns and support for industry standards Flexibility Choice of business applications and services from IBM and IBM Business Partners Return on investment (ROI) Build a differentiated retail capability and business value— one project at a time IBM Retail Industry Framework Supply chain Marketing and customer management IT systems and operations Merchandising and product management Store and channels Business and finance administration Information & Analytics Business Processes People Product & Service Innovation Security Operations

IBM provides a comprehensive framework that delivers accelerates solution deployment The framework provides a banking- specific software platform with… Banking extensions and pre-built solution accelerators to speed deployment Best practices and business- specific usage patterns to lower risk Support for adoption of open and industry standards A choice of business applications from IBM business partners An approach to align technology with business needs The framework gives you speed, flexibility and choice in deploying solutions while reducing cost and risk! Integrated Risk Management Customer Care and Insight Integration Optimization Analytics Collaboration Security Resiliency Core Banking Transformation Payments and Securities IBM Banking Industry Framework 6

Government Services, particularly social security and social services, are key services and a major budget factor for all governments. GOVERNMENT Manage Resources Effectively Strengthen National Security and Public Safety Improve Citizen & Business Services Ensure a Sustainable Environment Improve Citizen & Business Services Outcomes-based Social Services  Citizen-centered design  Integrated Case Management 7

8 Software is key to addressing these challenges, transforming the planet and making businesses smarter Smarter energy and utilities Smarter government Smarter healthcare Smarter solutions for retail Smarter banking Smarter insurance Smarter telecommunications Smarter chemical and petroleum Smarter electronics Smarter transportation

Software Data everywhere As the world becomes more instrumented, the challenge is to get more out of the wealth of new information—from managing data to developing insights. Differentiation through people As always, it’s the capabilities and ingenuity of the people in business that deliver results. But today, it’s about more than just those on your payroll—the greater opportunity is how well you can engage a worldwide ecosystem of employees, partners, suppliers, and customers to help create new value. New expectations for value Customer expectations have never been higher: Personalized service, delivered flawlessly. Global integration and connectivity As the world becomes more interconnected and as the paradigm of the organization shifts from multinational corporation to globally integrated enterprise, businesses can no longer afford to operate as islands. More than ever, they need to find ways to connect both internally and externally. Security risks Technology has allowed work to move beyond physical locations and brand offices. It now exists on virtual platforms, across dispersed teams and players. But the more data and information organizations make available to their internal audience, the greater the risk. But with new models and ways of working come new challenges... Business 9

10 IBM software delivers virtually unmatched capabilities, integrated into industry solutions that yield quantifiable business benefits while making the planet smarter.

11 Segment pretax Income How is IBM software helping deliver better business outcomes? Massive investments, leading innovations IBM changed the mix of the business Hardware/financing 42% 16% 40% 37% 23% 25% 40% 35% SoftwareServices IBM investment has shifted the company toward software More than US$8 billion in acquisitions and US$9 billion in research and development (R&D) from 2007–2009 US$20 billion in future acquisitions 53 software acquisitions since innovation centers, 80 R&D labs, 33,000 developers, more than 30,000 IBM Business Partners Focus on software solutions and business process transformation Backup – notes slide 3