1. © 2014 IBM Corporation Cloud & Smarter Infrastructure SaaS 201 - for Partners

2. © 2014 IBM Corporation 2  SaaS Refresher SaaS Refresher  What is SaaS  How does SaaS help?  SaaS Sales Process SaaS Sales Process  Partner Programs Partner Programs  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Where to Start Where to Start  Tools and other resources Tools and other resources Agenda

3. © 2014 IBM Corporation 3 What is Software as a Service (SaaS)?  Software as a Service (SaaS) is a software delivery model in which software and associated data are centrally hosted in the cloud. SaaS is typically accessed via a web browser. Payment for the service is through a subscription model.  You are using SaaS today if you access applications like Facebook, Twitter, or gmail. See the last page in this deck for additional resources on SaaS, Cloud, and utility-based computing

4. © 2014 IBM Corporation 4 How can SaaS help? Improved TCO due to lower infrastructure cost Flexible subscription pricing Minimal upfront investment Continuous delivery of new capabilities allows rapid innovation and access to immediate code fixes Lower risk with try & buy approach Accelerates evaluations and decision making

5. © 2014 IBM Corporation 5  SaaS Refresher SaaS Refresher  SaaS Sales Process – see the Channel SaaS Program Tool guide on the SaaS CoC SaaS Sales Process  Partner Programs Partner Programs  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Where to Start Where to Start  Tools and other resources Tools and other resources Agenda

6. © 2014 IBM Corporation 6  SaaS Refresher SaaS Refresher  SaaS Sales Process SaaS Sales Process  Partner Programs Partner Programs  Software Value Plus - SVP  SaaS Referral  SaaS Service Provider – SSP  Generate a partner URL to track leads  Using credit cards with Service Engage  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Where to Start Where to Start  Tools and other resources Tools and other resources Agenda

7. © 2014 IBM Corporation 7 I resell hardware or software I want to resell access to IBM hosted SaaS. IBM Software Value Plus (SVP) SaaS I sell solutions, manage accounts & provide support I want to sell access to IBM hosted SaaS with my solutions and own the customer relationship IBM Software as a Service Solution Provider Solutions for different types of SaaS Business Models I consult, refer, and resell software I want to refer IBM hosted SaaS IBM Referral Incentive for SaaS and Software Note: General guidelines. One size does not fit all. Could be a blended use.

8. © 2014 IBM Corporation 8 IBM delivered SaaS MSPVADVARGSIASP IBM Software Value Plus (SVP) - Resell Leverage standard two tier distribution channel  Business Relationship: −IBM hosts, supports (L1, L2) SaaS solution, bill VAD −VAD takes the order and bills BP −VAR takes order from customer, takes invoice, and resells customer −Customer is end user of solution  Demand Gen: Co-marketing, Web Content Syndication, VAD/ VAR campaign & events, Ready-to-Execute materials, PW Plays & collaterals, IBM demand gen  Sales Tool: VAD uses Partner Guided Selling Tool to quote and sell  Financial Incentive: −Standard VAD/ VAR model -> VAR is interface to client −Channel and Direct IBM reps are incented Business Partner role in SaaS Business Model - SVP IBM Config Data HelpDesk Partner Resellers sell SaaS VAD Client Contract End Users VADs sell an product in the IBM price book Criteria for VARs: 1.Join PW program 2.Create partner plan 3.Enroll in VAP or SVI (product and sales certifications in SVI) 4.Apply for IBM reseller authorization and select a VAD VAR

9. © 2014 IBM Corporation 9 Operational Model on Engage: IBM Software Value Plus Program IT Practitioner Business Partner Sandbox Accesses Live Demo Trial Environment Partner Specific URL to Trial Access Leads Lead$ IBM Hosted Trial Environment Unica Request to purchase through Business Partner Requests support through Engage Paid Standard VAD/ VAR model Forum, L1, L2, L3 IBM’s Partner Guided Selling Tool APM WA SCCD MAM

10. © 2014 IBM Corporation 10 IBM SaaS Referral Incentive Leverage IBM SaaS Offerings to enhance solutions IBM delivered SaaS  Business Relationship: −IBM provides support, invoice, billing, hosted solution −BP identifies opportunity, Co-Sell with IBM −Customer is end user of the solution  Demand Gen: Co-marketing, Web Content Syndication, VAD/ VAR campaign & events, Ready-to-Execute materials, PW Plays & collaterals, IBM demand gen  Sales Tool: Partner uses SaaS Referral Incentive Portal  Financial Incentive: −BP earn 15% fees on Annual Contract Value −Multi-year contracts are payable each year of service −With active BP engagement, BP earns 5% fee for renewals; 15% on any extended cost of contract IBM Client Config Data Contract End Users Help Desk Partners Referring SaaS MSPVADVARGSIASP Business Partner role in SaaS Business Model – SaaS Referral Get Started:  Partner has sales mastery in Product Group  Complete Referral Incentive BP Profile  Accept SaaS Referral agreement  www.saasincentive.com  Register opportunities  Claim when sale is done

11. © 2014 IBM Corporation 11 Operational Model on Engage: IBM SaaS Referral Incentive Program IT Practitioner Business Partner Sandbox Accesses Live Demo Trial EnvironmentRequest to purchase through Engage Partner Specific URL to Trial Access Leads Lead$ IBM Hosted Trial Environment Unica Requests support through Engage Paid 15% of Annual Contract Value Deliver Forum, L1, L2, L3 APM WA SCCD MAM

12. © 2014 IBM Corporation 12 IBM IBM SaaS Solution Provider (SSP) BP’s expertise with IBM SaaS IBM delivered SaaS  Business Relationship: −IBM hosts, provides partner L2 and L3, invoice and deliver solution to partner −SSP sells, invoice, delivers solution, L1 support to customer, single interface to the customer, provides value add services or code  Demand Gen: Co-marketing, Web Content Syndication, VAD/ VAR campaign & events, Ready- to-Execute materials, PW Plays & collaterals, IBM demand gen  Sales Tool: IBM Rep uses SQO to get quote and sell to SSP  Financial Incentives: −SSP prices solution independently Earn 25% on subscription parts, for life of contract (single- customer) −Earn up to 35% off tier price point for life of contract (multi-customer) Client SP Config Data Contract User Customer Multi-User Single-Customer MSPVADVARGSIASP End Users Help Desk Partners as a SaaS Service Provider SSP BP Storefront Business Partner role in SaaS Business Model - SSP Criteria:  Demonstrate required Sales, Technical, and Support Criteria  Complete Support Plan Template  Accept Reseller Agreement  Provide Support Desk  Demonstrated SaaS Value C&SI is doing Single customer as 1 st phase

13. © 2014 IBM Corporation 13 IBM’s Software Quote and Order Tool Operational Model on Engage: IBM SaaS Solution Provider Program IT Practitioner Business Partner Sandbox Accesses Live Demo Trial EnvironmentRequest to purchase through partner portal Partner Portal Partner Specific URL to Trial Access Leads Lead$ IBM Hosted Trial Environment Unica Partner Value add Code Requests support through partner portal Deliver Earn 25% on subscription APM WA SCCD MAM

14. © 2014 IBM Corporation 14 How do I maintain my leads? BP provides their unique IBM Service Engage url to client SaaS DSR SaaS DSR qualifies the client & informs BP that client has started trial BP Client SaaS Direct Sales Rep receives client response associated with BP and matches to trial list Client registers Client receives free trial 1 2 3 4 Trial list 5 Support Learn Explore Try Use / Buy Extend

15. © 2014 IBM Corporation 15 e-Commerce Support in 26 countries & Passport Advantage

16. © 2014 IBM Corporation 16  SaaS Refresher SaaS Refresher  SaaS Sales Process SaaS Sales Process  Partner Programs Partner Programs  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Where to Start Where to Start  Tools and other resources Tools and other resources Agenda

17. © 2014 IBM Corporation 17 How is Revenue realized with SaaS?  ACV – Annual Contract Value of the Subscription Agreement  TCV – Total Contract Value of a Multi-year Subscription Agreement  Bookings – The Total dollar value of all new contracts signed. Usually Billings are an annualized number even for different contract durations. Billings are not always helpful in understanding the state of SaaS business.  MRR – Monthly Recurring Revenue at the end of each month (like rent). MRR is the sum of the prior contracts + new contracts signed this month – expired contracts.  Churning MRR – Lost MRR from lost customers  Margin – the total discount off list price Business Partner can expect to receive

18. © 2014 IBM Corporation 18 SaaS Subscription Examples Margins ScenarioTerm (months) QuantityMetricMonthly Subscription TCVACVSVP 1 SaaS Referral SSP Scenario 1: Subscription signed for 1 year covering 40 VMs 1240 Virtual servers $25 each $12,000 $1200- $2400/yr --- $120- $240/mo $1800/ yr $3000/ yr --- $300/mon Scenario 2: Subscription signed for 3 years covering 100 users 36100 Auth users $99 each All 3 years $356,400 $118,800 All 3 yrs $11880- $23760/yr --- $990- $1980/mo All 3 yrs $17820/yr Claimed All 3 yrs $29700/yr --- $2475/mo All 3 yrs Scenario 3: 50 new users added to scenario 2 in Year 2 36 24 Yr 1: 100 Yr 2: 150 Yr 3: 150 Auth users $99 each All 3 years Contract 1: $356,400 Contract 2: $118,800 Contract 1: $118,800 Contract 2: $59,400 $11880- $23760/yr $990- $1980/mo All 3 yrs --plus-- $5940 – $11800/yr $594 - $990/mo Yrs 2 & 3 $17820/yr Claimed All 3 yrs --plus— $8910/yr Yrs 2 & 3 $29700/yr --- $2475/mo All 3 yrs --plus— $14850/yr $1237/mo Yrs 2 & 3 Note that for Scenario 3, the total TCV and ACV would be the sum of Contracts 1 & 2

19. © 2014 IBM Corporation 19 On-premise to SaaS Conversion Example – SCCD Acme Co. has 100 SmartCloud Control Desk on-premise 100 authorized user licenses. Acme wants to move 40 users to SaaS so they subscribe to 40 SmartCloud Control Desk (SaaS) authorized users. Acme wants to protect their investment and reserve the option to move back to on-premise if needed. The chart below shows the Acme current yearly costs for on-premise licenses/S&S and then compares the cost between using the Conversion program vs No conversion (SaaS at list). 6% annual savings* over no conversion cost *Savings does not reflect infrastructure and labor costs transferred to IBM

20. © 2014 IBM Corporation 20  SaaS Refresher SaaS Refresher  SaaS Sales Process SaaS Sales Process  Partner Programs Partner Programs  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Where to Start Where to Start  What C&SI SaaS offerings can you sell now?  Land & Expand  Tools and other resources Tools and other resources Agenda

21. © 2014 IBM Corporation 21 What SaaS Offerings can you sell NOW? IBM Monitoring (SaaS) $25/month per Average Managed Virtual Server (aMVS) IBM Application Diagnostics (SaaS) $120/month per Average Managed Virtual Server (aMVS) IBM SmartCloud Control Desk (SaaS) $99/month per Authorized User $297/month per Concurrent User IBM Workload Automation (SaaS) Starts at $70 per 1000 executed jobs per month h From 251k to 1,000k, each pack of 1k is priced at $35/month From 26k to 250k, each pack of 1k is priced at $56/month From 1k to 25k monthly executed jobs, each pack of 1k is priced at $70/month >1000k jobs, each 1K job pack is priced at $21 per month Maximo Asset Management (SaaS) $159/month per Authorized User $477/month per Concurrent User Maximo Asset Management (SaaS) Scheduler (pre- req Maximo AM (SaaS) $40/month per Authorized User

22. © 2014 IBM Corporation 22 Tremendous opportunities to up-sell and cross-sell It is a huge differentiator that other vendors cannot match! If your customer has thisSell them thisScenario SmartCloud Control Desk (SaaS)IBM Monitoring (SaaS)Detect an issue, automatically open a ticket Netcool OMNIbusGenerate alerts when monitored KPI exceeded Business Service ManagementImprove MTTR for monitored business processes SmartCloud AnalyticsPredict and prevent problems with insight into patterns and trends present in log files Workload AutomationQuickly and easily identify system and application problems that are impacting your workload Cognos, Datastage, Informatica, Netezza, WebSphere MQ, Platform LSF, Sterling Connect Direct Workload Automation (SaaS) Integrate scheduling needs of business applications like Cognos, Datastage, Netezza,etc. Netcool OMNIbusCreate alerts for workload problems SmartCloud Control Desk (SaaS)Open incidents for workload failures IBM Endpoint ManagerSmartCloud Control Desk (SaaS) Trigger automatic provisioning of a desktop Netcool OmnibusGenerate tickets based on selected events Tivoli Application Dependency Discovery Manager (TADDM) Use Configuration Information (CI) and relationship data to manage unplanned change Note that all of the offerings in the middle column have on-premise versions Choice is something only IBM can offer.

23. © 2014 IBM Corporation 23 Tremendous opportunities to up-sell and cross-sell – part 2 If your customer has thisSell them thisScenario Netcool OmnibusMaximo Asset Management (SaaS) Generate tickets based on selected events Maximo Inventory InsightsOptimized inventory levels through analytics Smarter CitiesLink assets to municipal operations Maximo Asset ManagementMaximo Inventory Insights (SaaS) Leverage Pre-configured inventory decision support system to generate optimal reorder management and obtain insight on “stagnant” inventory

24. © 2014 IBM Corporation 24 How to Farm SaaS Deals – IBM Monitoring (SaaS)  Starting point: The customer bought a small installation of IBM Monitoring (SaaS) for applications and infrastructure  Grow the existing footprint to other users  Who has a similar job to yours? Will you introduce me to them, or to someone who makes tool decisions for you and your peers?Grow use of IBM Monitoring  Grow the existing footprint by adding additional applications  What other applications are considered critical by your company, and need to be monitored?  Since you were successful with this application, can we explore the next one? Who owns that application? What happens to your company if it goes down or is slow?Grow use of IBM Monitoring  Grow the existing footprint by adding analytics*  APM customers can use their dashboard to search log files on servers configured for access by log analytics, speeding the time it takes to find out what’s really causing a problem. Expand with SmartCloud Log Analytics  Grow the existing footprint by adding network or storage management*  Now that you have an idea of your application performance would you like to grow your insight into your network and/or storage use?Expand with Tivoli Network Manager and Tivoli Storage Manager  Grow the existing foot print by adding event management*  So APM is working well and you have other tools monitoring your IT infrastructure, we often find customer's struggle understanding the holistic view of their environment, and frequently invest resources in chasing and correcting the symptom rather than root cause. When issues occur that span tools, could you use a tool to help eliminate symptoms and to quickly identify the root cause of the problem?Expand with Netcool OMNIbus  Leverage this SaaS experience to sell an expanded on-premises deployment  The SaaS offering helped you understand the technology and see the benefit of monitoring, but your organization prefers an on-premises deployment for security, performance or other reasons. Get full-spectrum on-premises infrastructure and application monitoring with SmartCloud APM  Grow the existing footprint by Control Desk*  APM customers can have their solution integrated with a help desk to speed and organize the process of tracking and resolving problems in their environment. Expand with SmartCloud Control Desk *Solution integrations are being developed and tested continuously. Initially, the SaaS offering will be integrated with on-premise deployments of complementary products, with a SaaS-to-SaaS offering when both products are available. The Extend tab on Service Engage will provide you with the latest information on the available integrationsExtend tab on Service Engage Steve – page is being reworked per 3/10 call

25. © 2014 IBM Corporation 25 How to Farm SaaS Deals – IBM Workload Automation (SaaS)  Starting point: The customer bought a small installation of IBM WA (SaaS)  Grow the existing footprint with additional packs of jobs  Are you ready to react to unexpected conditions and keep the actions in sequence and still optimized ?  Would you like to control your heterogeneous workloads from a single point, and with a single skill-set ?  Grow use of IBM Workload Automation  Grow the existing footprint by integrating new business workloads  Is it important to your business to have a predictable long-term vision of your plans and business objectives ?  Are missing SLA costly to your organization?  Have you consider integrating your ERP & BI workloads to lower the costs of non-integrated solutions and eliminates causes of human errors ?  Grow by integration with Cognos, Datastage, Informatica, Netezza, WebSphere MQ, Platform LSF, Sterling Connect Direct  Grow the existing footprint by adding additional solutions  Netcool Omnibus can provides a single central consolidated view of all events across multiple products and solutions. Integrate the events from the workload automation solution into the event management system Expand with Netcool Omnibus.  The workload automation customers can have their solution integrated with a help desk to speed and organize the process of tracking and resolving problems in their environment Expand with SmartCloud Control Desk. Steve – page is being reworked per 3/10 call

26. © 2014 IBM Corporation 26 How to Farm SaaS Deals – IBM SmartCloud Control Desk (SaaS)  Starting point: the customer is doing a trial or pilot of Control Desk (SaaS)  Background: Most customers will already have a service desk, but it will often be backlevel, missing needed function (e.g. service catalog, IT Asset Management), they lack skills to manage the system, and they face a potentially expensive upgrade if they need to improve function  Message: “Control Desk (SaaS) will provide the modern function you need, have low up front costs, reduce your skill and support costs and requirements, and provide a low, flat, predictable cost structure. It is the best way out of the situation you are in.”  Grow the existing footprint to other processes and user groups  Background: If the client starts use of Control Desk with base processes like incident and service request, they will usually naturally look to expand into areas like problem and knowledge management, service catalog, change management, and IT asset management as they mature. Alternatively, if they start use of Control Desk with change management for instance, IBM can look to displace the service desk operation (incident, service request)  Message: “If you consolidate on Control Desk, it will save you training, support costs, and provide better service.” “If you add integrated change management through Control Desk, you can reduce incidents and outages related to change by 70%.”  Grow the existing footprint by adding additional applications: 1.Expand with IBM OMNIbus:  Background: Event storms can overwhelm service desk support staff and drive up costs  Message: “If you integrate Omnibus, your support team can focus on the common cause of issues and tickets and use automation to fix frequent, recurring problems” 2.Expand with IBM Endpoint Manager  Background: Many organizations suffer from having disconnected, time-consuming, error-prone processes to request, deploy and manage software assets  Message: “You can integrate with IEM to provide an online app store to customers and then automate the accounting, approval, and deployment, saving time and reducing errors.” 3.Expand with IBM TADDM  Background : without automated tools, discovery is time consuming, and chronically inaccurate, impacting cost and service  Message: “TADDM can save time and money though automating discovery. It provides a near real time view of your infrastructure and services so your IT group can see and manage the configurations that impact services. This can help proactively avoid issues and greatly reduce time to problem resolution.” Steve – page is being reworked per 3/10 call

27. © 2014 IBM Corporation 27 How to Farm SaaS Deals – Maximo Asset Management (SaaS) Steve – need MAM

28. © 2014 IBM Corporation 28  SaaS Refresher SaaS Refresher  SaaS Sales Process SaaS Sales Process  Partner Programs Partner Programs  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Legal – Compliance Overview, Key Terms  Data Privacy – What you need to know, EU Safe Harbor, Solution Hosting  Security – Security Practices  Where to Start Where to Start  Tools and other resources Tools and other resources Agenda

29. © 2014 IBM Corporation 29 Legal - Compliance Overview Compliance = Softlayer Compliance + C&SI SaaS ComplianceSoftlayer Compliance Unless both are compliant we can’t claim compliance.  Payment Card Industry Data Security Standard (PCI DSS) - Compliant  Set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment.  C&SI processes credit card information through IBM Payment Systems which is PCI compliant  Federal Risk and Authorization Management Program (FedRAMP) - Not Compliant (in progress)  Government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.  One of the key requirements is Federal Information Security Management Act of 2002 (FISMA)  EU Safe Harbor (See EU Safe Harbor section) – Certification in process

30. © 2014 IBM Corporation 30 Legal - C&SI SaaS Contract Options  IBM International Passport Advantage Agreement (IPAA) – includes SaaS terms regarding ownership, customer’s right to use, subscription to SaaS, SaaS technical support, content and termination of SaaS  Passport Advantage customers using direct or e-Commerce to purchase  Terms of Use (TOU) B – standard terms of use for IBM SaaS offerings. This is in addition to IBM or IBM IPPA Express Agreement Terms of Use (TOU) B  TOU A – terms of use specific to a SaaS offering (e.g charge metrics, renewal) TOU A  Service Level Agreement (SLA) – specific to a SaaS offering Note: A SaaS Solution Provider may require additional agreements for approval

31. © 2014 IBM Corporation 31 Legal - Key Terms  Automatic renewal – contract is automatically renewed unless customer cancels.  Example: Customer purchases a 12 month term with monthly billing and on month 15 decides they no longer need the service they DO NOT have the option to terminate and will be responsible for the remaining 9 months of coverage (the full 12 month term).  Indemnity - Customer agrees to hold IBM harmless against any third party claim arising out of or relating to: 1) violation of the IBM Acceptable Use Policy by Customer or any of Customer’s IBM SaaS Users; or 2) Content made available to the IBM SaaS.  Non-disclosure of Customer Content – TOU B indicates that IBM will not use client data for any reason but to operate SaaS and will be kept confidential Applies to IBM Software Value Plus

32. © 2014 IBM Corporation 32 Legal - Service Level Agreements One per CSI SaaS Offering (no charge)  “Availability” percentage is calculated as: (a) the total number of minutes in a Contracted Month, minus (b) the total number of minutes of Downtime in a Contracted Month, divided by (c) the total number of minutes in a Contracted Month, with the resulting fraction expressed as a percentage.  Example: 432 minutes total Downtime during Contracted Month Availability during a Contracted Month Availability Credit (% of Monthly Subscription Fee for Contracted Month which is the subject of a Claim) Less than 99.8%2% Less than 98.8%5% Less than 95.0%10% 43,200 total minutes in a 30 day Contracted Month - 432 minutes Downtime = 42,768 minutes ________________________ 43,200 total minutes in a 30 day Contracted Month = 2% Availability Credit for 99.0% availability during the Contracted Month Terms found in TOU A or Cloud Services Agreement Services Description

33. © 2014 IBM Corporation 33 Data Privacy - What you need to know Personal data generally includes information relating to an individual -think business card (e.g. names, email addresses, home address) In some countries, also includes information about identified partnerships, associations, or corporations. IBM is a data processor, entity that processes personal data on behalf of the data controller, who would be the client responsible for entering the data. In most cases, Passport Advantage agreement covers data privacy for personal data. EU and Switzerland have additional data privacy regulations but have established the ability to create a framework with the U.S for accessing personal data. C&SI SaaS is in the process of obtaining EU Safe Harbor certification. This requires a risk assessment after we Go Live. In the meantime, we have security measures in place to restrict access to EU client data and for IBM non-U.S. employee access to Amsterdam hosting center in order to comply.EU Safe Harbor IBM has an Online Privacy Statement which is another EU Safe Harbor requirementOnline Privacy Statement

34. © 2014 IBM Corporation 34 Data Privacy - EU Safe Harbor Certification EU and Switzerland have specific data privacy regulations and have established the ability to create a framework with the U.S for accessing personal data called EU Safe Harbor. to prevent accidental information disclosure or lossEU Safe Harbor. C&SI SaaS is in the process of obtaining EU Safe Harbor certification Benefits:  Ability to assert Safe Harbor to clients and prospects.  Facilitates selling in the EU and Switzerland.  Makes us competitive in selling situations.

35. © 2014 IBM Corporation 35 Where are the C&SI SaaS solutions hosted? Active Data Centers - SoftLayer Singapore Dallas Amsterdam  All C&SI SaaS offerings are currently hosted in SoftLayer data centers.  In 2014, additional data centers will be provided (SoftLayer or partner), based on business needs.

36. © 2014 IBM Corporation 36 Security - C&SI SaaS Security Practices  Data Security – each offering has a Security Practices document  Security Policy – states that IBM has published privacy and security policies and that employees are trained in security  Access Control  Only authorized employees can access client data  Support staff for the Cloud Offering use multi-factor authentication and encrypted channels when accessing client data  Data transfers are logged  Service Integrity & Availability  Change Management process governs changes to O/S, application s/w and firewall  Data center resources are monitored 24x7  Internal and external vulnerability scanning and malware detection  Information delivery protocols for transmission of data over public networks (e.g HTTPS, VPN)  Physical Security  Designed to restrict unauthorized physical access to data center resources.  Entry and removal of equipment is logged  Compliance  Assessments and audits are conducted regularly by IBM’s team to confirm compliance with its information security policies.  Conduct workforce security education and awareness training  Note: The Security Practices are also included in the Cloud Service Agreement Service Description for each offering.

37. © 2014 IBM Corporation 37 Security – ITCS104 & Industry Standards Certifications C&SI SaaS offerings adhere to the rigorous standards of ITCS104 security There are many industry standards that require certification. C&SI is evaluating the priority order based on client demand  Health Insurance Portability and Accountability Act (HIPAA) – Not Certified  Requires certification through HIPAA Program Office (HPO)HIPAA Program Office (HPO)  Data Centers do not get certified in HIPPA – SoftLayer Internal HIPPA whitepaperSoftLayer Internal HIPPA whitepaper  SSAE 16 - Not Certified  SOC2 Type II Compliance - Not Certified  Cloud Security Alliance STAR Self Assessment - Not Certified  EU Safe Harbor (See EU Safe Harbor section) – Certification in process

38. © 2014 IBM Corporation 38  SaaS Refresher SaaS Refresher  SaaS Sales Process SaaS Sales Process  Partner Programs Partner Programs  Compensation & Measurements Compensation & Measurements  Legal, Data Privacy, and Security Legal, Data Privacy, and Security  Where to Start Where to Start  Tools and other resources Tools and other resources  Center of Competency  Resources & Tools Agenda

39. © 2014 IBM Corporation 39 Service Engage Sales Center of Competency The Center of Competency (CoC) serves as a war room to provide resources for sellers to help close SaaS deals. The CoC web site provides the following general information:  Overviews  FAQs  Terms & Conditions  Privacy  SaaS vs on-premise  Competition  Pricing  ELAs & SaaS  Sample User Scenarios  Typical sales cycle for a SaaS deal  Links to payload info The CoC web site provides the following information for each SaaS payload:  Offering Capabilities  Scalability & Security issues  References  FAQs  SaaS versus On-premise  Dealing with competition  Typical Sales Cycle for this payload  Pricing, entitlements, trade-ups  Terms & Conditions  TCO calculators  Integrations & Extensions  Doing evaluations For IBM Sellers: https://ibm.biz/salescoc https://ibm.biz/salescoc For Partners: www.ibm.com/csicenter/partnerswww.ibm.com/csicenter/partners

40. © 2014 IBM Corporation 40 Resources used by C&SI partners  Tools:  IBM Service Engage is the landing page for C&SI SaaS offerings. Customers can learn, explore, demo, set up a trial, and purchase offerings. IBM Service Engage  Software Value Plus program uses Partner Guided Selling (PGS) Tool to process all Tier 2 SaaS Offering Quotes by the VADPartner Guided Selling (PGS) Tool  SaaS Solution Provider program uses Software Quote & Order (SQO) Tool for all SaaS Solution Provider Quotes entered by an IBM RepSoftware Quote & Order (SQO) Tool  SaaS Referral Program uses SaaSIncentive.com Tool to process SaaS opportunities and claims entered by Business PartnersSaaSIncentive.com Tool  Other resources for sellers:  C&SI SaaS Sales Kit & Center of Competence on Partner World C&SI SaaS Sales Kit & Center of Competence  To learn more about the technologies:  Cloud, Cloud computing CloudCloud computing  SaaS: WWW, YouTubeWWWYouTube

41. © 2014 IBM Corporation 41 What should I do next?  Go to Service Engage, learn about it, provide feedbackService Engage  Learn about SaaS and C&SI’s 1H 2014 SaaS offerings.  Approach your top 5 customers with these questions:  Does the overwhelming cost of maintaining their infrastructure hinder developing new services that could bring in additional revenue?  Do they need to gain access to new capabilities quicker to innovate faster and stay ahead of their competitors?  Do they want to lower their Total Cost of Ownership (TCO) ?  Determine where your customer wants to be, and how they should get there.  Encourage them to test drive Service Engage todayService Engage  Look for opportunities to up / cross-sell  Make a SaaS proposal. C&SI Strengths:  Customer choice: On- premise, SaaS, integrated experience  Integration with broader Service Management capabilities  Accelerate sales velocity with Service Engage  Unsurpassed breath of capabilities