1 Building a Smarter Planet – Green and Beyond David Turek VP Deep Computing © 2009 IBM Corporation

2 The world is hot, flat, and crowded. Thomas Friedman Fortunately, it is also getting smarter.

3 Our world is becoming INSTRUMENTED We now have the ability to measure, sense and see the exact condition of everything. Our world is becoming INTERCONNECTED People, systems, and objects can communicate and interact with each other in entirely new ways. Virtually all things, processes and ways of working are becoming INTELLIGENT We can respond to changes quickly and accurately, and get better results by predicting and optimizing for future events.

4 In 2001, there were 60 million transistors for every human on the planet… by 2010 there will be 1 billion transistors per human Instrumented …every location, state, temperature, condition will become a source of valuable insight In 2005 there were 1.3 billion RFID tags in circulation…… by 2011 there will be 30 billion

5 Worldwide mobile telephone subscriptions reached 3.3 billion in 2007 An estimated 2 billion people will be on the Web by 2011 Interconnected …systems working together in new ways Daily financial market messages growing from 5 billion in 2006, to 130 billion+ per day in 2011 Our personal information footprints will grow 16 times between now and 2020

6 We’ve thought about IT as the world of data centers, software, PCs, routers, bandwidth. We’ve thought about infrastructure as the world of buildings, factories, hospitals, roads, pipelines. Those worlds are converging. The world can become smarter. We’re building it with our clients. Intelligent …every insight results in action that creates new value

7 Of all the potential electricity available in an energy source, only 30 percent reaches consumers… …an estimated 170 billion kilowatts are wasted by consumers each year due to insufficient power usage information

8 What’s smart? Smart appliances, meters and sensors adjust consumption dynamically based on usage Smarter Business Outcomes 10 percent lower electricity bills 50 percent reduction of short-term peak loads $70 billion projected savings through better use of existing infrastructure Smart Utilities Example Pacific Northwest National Laboratory changes the business model for energy delivery

9 Forty-five percent of traffic on the busiest New York City streets is circling the block looking for parking… …congested roadways cost $78 billion annually in the form of 4.2 billion wasted hours and 2.9 billion gallons of wasted gas

10 What’s smart? New, dynamic business model Congestion charging Real-time traffic prediction Technology to optically recognize cars in milliseconds Real-time congestion tolling Smarter Business Outcomes 25 percent reduction in traffic 40,000 more citizens on public transportation Less noise pollution and lower carbon emissions Smart Traffic Example City of Stockholm breaks gridlock with a smart road use management system

11 In the U.S., a typical carrot has traveled 1,600 miles, a potato 1,200 miles, a beef roast 600 miles …grocers and consumers throw away $48 billion worth of food every year

12 What’s smart? First of a kind tracking solution to ensure meat products kept in optimal condition from farm through supply chain to retail store. Smarter Business Outcomes Tagged over 3 million crates for tracking Allows parent company, Nortura–a cooperative of 31,200 farmers in Norway to improve delivery locally produced sustainable meats and eggs Smart Supply Chain Example Matiq turned its attention to developing solutions for food safety and traceability

13 50 percent of the world’s population is projected to live in areas of water scarcity by Industrial use accounts for about 22 percent of freshwater usage today. …the combined direct consumption of five food and beverage giants in 2007 was enough to serve the daily basic water needs of everyone on the planet

14 What’s smart? Reduced waste, annual savings: –20 million gallons of process water –15,000 gallons of chemicals –1,550,000 kWH of electricity Smarter Business Outcomes $3 million in annual savings by reducing water usage by 27 percent Over 30 percent manufacturing production increase Smart Water Management Example IBM retooled chip making process to focus on reducing the use of water, energy and chemicals

15 Information Technology energy use is growing 12 times the overall demand. Data Centers alone consumed 180B kilowatts in 2007 …Data center electricity usage will double to 100 billion kWh or $7.4 billion by the year 2011.

16 What’s smart? Increased productivity, reliability and availability Dynamic data center approach Smart energy consumption Smarter Business Outcome Average achievable energy savings 40%+ Assessments can show average pay back < 2 years Average utilization rates can be increased 2X to 4X Defer new data center investments Smart Data Center Example Kika-Leiner implements “green data centers" to support rapid growth

17 IBM Example Retrofitting existing buildings to be more energy efficient typically reduces total energy consumption by %... …while new “green” buildings have the potential to reduce energy consumption by 80% or more.

18 IBM Example Smart Green Building Example IBM opens its largest data center and greenest location worldwide What’s smart? Maintain and manage lifecycle of facilities and assets Use property best practices for power, temperature, layout, and identification of problems Smarter Business Outcome Provides for water-cooled IT equipment Uses low-sulfur fuels for backup generators Mechanical system design is 40 percent more efficient than one without heat exchangers for free-cooling 6,550 tons of GHG reduction annually Qualified for incentives from state and local energy provider

19 Laws, Regulation, Standards Business Opportunities and Challenges Stakeholder Pressures Costs and Availability Factors and Influencers That Will Demand Our Attention

20 Strategy PeopleInformationProduct ITPropertyBusinessoperations Holistic Approach is Recommended

21 visit ibm.com/green ++= We have the opportunity to think and act in new ways— efficient, smart and sustainable. The question is, what will we do with it?