2. Business of acquisitions Zoran Hrustic Director of Sales IBM Software Group CEEMEA

3. Business of acquisitions IBM Strategy and why do we do acquisitions What does it mean to our clients globally from overall solution perspective What relevance this strategy has to South African Market Why should you feel good about it

4. 2009 – A Year of Challenge & Opportunity “IBM has also adjusted its M&A strategy to follow suit. Its biggest acquisitions of late – Cognos, FileNet, and PricewaterhouseCoopers – have all added to the technology giant’s already formidable data acquisition, analysis, and consulting capabilities.”

5. IBM SWG Acquisitions “….we reach a point where we cannot create certain things. Sometimes there are things that are a little bit outside of our core competency and we leverage acquisitions as a way to bring that competency into IBM, expand the footprint of inventiveness that we have and then thereby increase the portfolio … …clearly we are bringing in a lot of deep technical skills that in their own rights bring strong, inventive characteristics to the table.” Steve Mills, Senior VP and Group Executive, SWG Internal IBM Software Talk April 2008 IBM SWG has made 52 software acquisitions since 2000, including 8 in the first 4 months of 2008.

6. IBM’s Strategy Focus on open technologies and high-value solutions Deliver integration and innovation to clients Become the premier Globally Integrated Enterprise

7.  Invest in high growth market segments  Leverage IBM’s global reach Geographic presence Deep technical skills Extensive client relationships Accelerate business through Value Partners  Capitalize on IBM’s unique ability to deliver SOA, Information on Demand, Web 2.0, Management Services, and Application Development  Selectively acquire software companies to extend the product portfolio IBM Software Revenue Growth Strategy

8. Evolution Towards Middleware Software Development ServersStorage LinuxUnixWindowsOS/400z/OS Systems Management & Security Transactions, Messaging & Integration Human Interaction & Collaboration Business Processes Business Processes Applications Systems Middleware Information Management

9. Software Solutions Portfolio Tivoli WebSphere Rational Information Management Lotus Information Platform Data Management Content Management Security Mgmt Systems Mgmt Storage Mgmt Transaction Processing Application Servers Business Integration Change and Release Mgmt Process and Portfolio Mgmt Business Intelligence Architecture Mgmt Information On Demand ( IOD ) Service Oriented Architecture ( SOA ) Next Generation Collaboration IT Service Management IT Lifecycle Management & Governance Content Management Social Computing Messaging & Collaboration Unified Communications Situational Applications & Integration

10. Major Reasons for IBM Software Group Acquisitions Strategic Target high-value, high-growth market segments Extend portfolio into adjacent market segments Market consolidation Technology Accelerate delivery of capabilities we lack Skills Infusion of innovative talent

11.  High profile entry  Highly complementary technology buys  Gain time to market  Companies with significant revenue streams  Retain customers and leverage install base  Achieve cost and expense synergies + + + + + +  Buy market leaders in growth segments  Strong ecosystems  Large customer install bases  Usually command premium valuations Bold Market Entry Complementary (Point) Products Opportunistic Consolidations Market Leadership Augmenting organic growth with strategic acquisitions

12. Expanding Our Platform Through Acquisitions Empowering People Pathware (1999) Web based e-Learning Aptrix (2003) Web Content Mgmt PureEdge (2005) Secure xml e-Forms BowStreet (2005) Development Tools for Portals WebDialogs (2007) Online meeting & collaboration Net Integration Tech (2008) Small business server- solutions Lotus (1995) Collaboration & Productivity Databeam (1998) Realtime & Distance Learning Ubique (1998) Instant Messaging & Chat ONEstone (1999) Workflow Service Management Rembo (2006) Automatically install or upgrade OS on multiple systems MRO (2006) Asset & Service Mgmt ISS (2006) Internet Security Systems SW & Services DORANA (2006) SW Asset Mgmt Vallent (2006) Network Performance Monitoring & Service Mgmt for Wireless Consul (2006) Compliance & Security Audit Encentuate (2008) Identity & access management software KnowledgeX (1998) Complex Data Mining IW Manager (1998) Query Manager Informix (2001) Distributed Unix DBs Tarian (2002) Record Management CrossAccess (2003) Info access to Mainframe DBs Green Pasture (2003) Compound Document Mgmt DataMirror (2007) Real-time data integration & data protection Princeton Softech (2007) Database archiving & test data management Cognos (2008) BI & Performance Mgmt Platform Solid Information Tech (2008) Real-time, all-the-time info access DWL (2005) Customer Data Integration & Mgmt iPhrase (2005) Adaptive info delivery & discovery LAS (2006) Mult-cultural name recognition Unicorn (2006) Enterprise Metadata Mgmt FileNet (2006) Business process & Content Mgmt Think Dynamics (2003) Automated server provisioning (orchestration) Candle Corp (2004) Systems Mgmt & Monitoring Cyanea (2004) Web Performance Mgmt & Monitoring Isogon (2005) IT Asset Mgmt Collation (2005) App centric views of cross- tier IT infrastructure Micromuse (2005) Network Mgmt CIMs Labs (2006) Track usage of resources across virtualized technology environments Tivoli (1996) Centralized Systems Mgmt Unison (1997) Job Scheduling DBMX (1997) Distributed DB Mgmt Dascom (1999) Security Access Control SANergy (1999) Storage Mgmt Accessible Software (2000) Mainframe Systems Mgmt Metamerge (2002) Directory Integration TrelliSoft (2002) Storage Mgmt Access360 (2002) Identity Mgmt Information on Demand Trigo (2004) Product Info Mgmt Alphablox (2004) BI Analytics & Alerts Venetica (2004) Access/Integrate unstructured info through SQL query SRD (2005) Identity resolution Ascential (2005) Enterprise Data Integration Software Lifecycle Management Rational (2002) Team-based end to end development tools Information Lab (2003) Development tool technology Systemcorp (2004) Project Portfolio Mgmt BuildForge (2006) Product development teams document what was created, developed & deployed Watchfire (2007) Security & compliance testing Telelogic (2007) Development SW for complex embedded systems Object Tech. (1996) Object Technology OpenOrders (2000) Order Management CrossWorlds (2002) Business Process Integration Holosofx (2002) Business Process Modeling & Monitoring Gluecode (2006) Open source Java DataPower (2005) Secure application-level messaging & xml processing Webify (2006) Industry-specific SOA SW Aptsoft (2008) Business-event processing ILOG (2008) Business rules and cross industry solutions Business Process Flexibility Application Infrastructure

13. Storage LinuxOS/400 Growth through acquisitions Processes Systems Environment Applications Middleware Environment Metamerge Micromuse Rembo Vallent DORANA (Ubiquity) Consul Encentuate Trellisoft Access360 Think Dynamics Candle Cyanea Isogon Tivoli Collation MRO CIMS Lab FilesX CrossWorlds Holosofx Gluecode DataPower Webify Solutions AptSoft InfoDyne ILOG z/OS Rational Information Labs SystemCorp BuildForge Watchfire Telelogic AB Information Management Software Development Systems Management & Security Transactions, Messaging & Integration Collaboration Ubique ONEstone Pathware Net Objects Lotus Aptrix Bowstreet PureEdge WebDialogs Net Integration Servers UnixWindows z/OS Informix SRD Tarian DWL Trigo iPhrase CrossAccess FileNet Alphablox Venetica DataMirror Green Pastures Unicorn Software Ascential Princeton Softech Cognos Language Analysis Solid Note: Acquisitions since Jan 2001

14. Information Integration Trusted Information Performance Management Business Intelligence Business Optimization Structured Data ESB SOA Business Spaces Dynamic Processes Enterprise Rules Transactions Protected Storage TSM/HSM Tiered Storage Information Infrastructure Office Productivity Collaboration Mashups FormsWCM Leveraging IBM SWG

16. Information Management Filenet – 1 sales person – 0 engineers – 1 business partner – Very few customers/1200 users IBM/Filenet 2009 – 8 sales specialists – 4 engineers, 5 IT architects – 4 business partners – Dozens of customers/18000 users

17. Information Management Cognos – 5 sales person – 6 engineers – 7 certified partners – 1400 customers IBM/Cognos 2009 – 7 sales specialists – 11 engineers 6 IT architects – 8 certified partners – About 2000 customers

18. Information Management Princeton Softech 2007 – 0 sales person – 0 engineers – 2 certified partners – Handful of customers IBM/Optim 2009 – 2 sales specialists – 2 engineers 6 IT architects – 3 certified partners – Dozen customers

19. Tivoli Micromuse – 0 sales people – 0 engineers – 1 partner – 3 customers IBM/Netcool 2009 – 4 sales specialists – 3 engineers 5 IT architects – 3 certified partners – 12 major customers

20. Tivoli MRO – 0 sales people – 0 engineers – 1 partner – 3 customers IBM/Maximo 2009 – 1 sales specialists – 1 engineers 2 IT architects – 1 certified partner – 8 customers in SSA

21. IBM Software Acquisitions: Partners for Growth

22. Zoran Hrustic zoran@ae.ibm.com