1. © 2007 IBM Corporation Israel VC Community Event Innovation that Matters Claudia Fan Munce Managing Director, IBM Venture Capital Group Vice President, IBM Corporate Strategy 2007 Israel VC Community Event

2. © 2007 IBM Corporation Israel VC Community Event The Current Wave of Global Integration When everything is connected, work moves… the work of business and the work of technology. Work flows to the places where it will be done best Source: INSEAD speech www.federalreserve.gov/boarddocs/speeches/2006/20060825/default.htmwww.federalreserve.gov/boarddocs/speeches/2006/20060825/default.htm Sam Palmisano Chair, IBM Corporation

3. © 2007 IBM Corporation Israel VC Community Event Globally Coupled Technology and Business Changes Enabling Culture and Legal Systems Global Infrastructure Global Resources Technology Landscape ChangesBusiness Landscape Changes Localized Systems Global Digital Infrastructure Local Resources & Partners Global Resourcing & Partnerships Proprietary Systems and Platforms Open Systems and Platforms Controlled, Proprietary Innovation Open, Collaborative Innovation Custom, Labor-based Services IP Asset-based Services Simple Value Chain Management Business Componentization Global Production

4. © 2007 IBM Corporation Israel VC Community Event Global Venture Capital On the Rise in 2006 Bay Area 92 deals $4.3B raised New England 148 deals $1.8B raised Southern California 121 deals $1.5B raised New York 107 deals $1.2B raised Texas 67 deals $593M raised United Kingdom 125 deals $822.7M raised France 83 deals $461.1M raised Germany 54 deals $311.8M raised Sweden 46 deals $155.4M raised Denmark 18 deals $167.8M raised Israel 112 deals $701M raised Beijing 37 deals $398.9M raised Shanghai 29 deals $179.9M raised Shenzhen 7 deals $71.9M raised Guangzhou 3 deals $11.3M raised Source: E&Y 2006 VC Investment Insights >US$5Billion >US$23Billion >US$1.5Billion India 80 deals $508M raised

5. © 2007 IBM Corporation Israel VC Community Event Developer Relations Corporate Communications Research Systems & Technology Group Global Services Software Group IBM Corporate Headquarter IBMs Global Venture Capital Team: Think Globally Act Locally Brazil India US Ireland Israel Japan China UK Germany Corporate Development Moscow Global Business Partners

6. © 2007 IBM Corporation Israel VC Community Event Revenue Growth GoTo Market activities Strategic insights IP Acquisitions Expanded ecosystems Infrastructure Portfolio Gaps addressed Expertise Give IBM - VC Partnerships: Identify, Leverage and Lead External Innovation Get

7. © 2007 IBM Corporation Israel VC Community Event Our current market Our new market Other firm´s market External technology insourcing Internal technology base External technology base Internal/external venture handling Licence, spin out, divest

8. © 2007 IBM Corporation Israel VC Community Event Startups Leverage IBMs Partner Ecosystem 1300 members in PartnerWorld From 21 in 2000 136 Advanced Partners 18 Acquisitions 316 members in PartnerWorld Industry Networks

9. © 2007 IBM Corporation Israel VC Community Event July 2005 Intent to form Blade.org 9 Members April 2006 First member meeting 60 Members Feb 2006 Formal launch New York 40 members June 2006 June 2006 Intel, OEMs, channel partners join 77 Members – 30 venture backed Open Global Standards: The Key to Unlocking Innovation

10. © 2007 IBM Corporation Israel VC Community Event "IBM has taken a leadership role in the market with their forward-thinking design approach and collaborative approach to accelerate the market through an ecosystem of partners developing components and solutions for customers." "IBM continues to create market and revenue opportunities for cutting-edge startups. Lip-Bu Tan, Founder & Chairman, Walden International VC + IBM: A Winning Partnership

11. © 2007 IBM Corporation Israel VC Community Event 2007 2004 Autonomic Computing Business Trans. Outsourcing Learning Solutions Retail on Demand Sensors & Actuators Web 2.0 SasS CleanTech Blade Servers Bus Process Integration Dynamic Workplace Flexible Hosting Services Storage Software STI Cell Processor Life Sciences Engineering & Tech. Services Pervasive Computing Digital Media Emerging Business Opportunities in Asia

12. © 2007 IBM Corporation Israel VC Community Event ibm.com /VentureCapitalGroup ibm.com /developerWorks