10
What we see shifting: Competitive advantage
will be created through data and analytics,
business models will be shaped by cloud, and
individual engagement will be powered by
mobile and social technologies.
Therefore, IBM is making a new future for our
clients, our industry and our company.
This is how.
The IBM Strategy.
The IBM Strategy 11
01
We are making markets by
transforming industries and
professions with data.
02
We are remaking enterprise IT
for the era of cloud.
03
We are enabling systems of
engagement for enterprises.
And leading by example.
12
01 We are
making markets
by transforming
industries
and professions
with data.
The IBM Strategy 13
WHAT WE SEE SHIFTING:
Data is becoming the world’s
new natural resource.
Today, every discussion about changes in technology, business and
society must begin with data. In its exponentially increasing volume,
velocity and variety, data is becoming a new natural resource.
It promises to be for the 21st century what steam power was for
the 18th, electricity for the 19th and hydrocarbons for the 20th.
1 trillion
connected objects and devices o n
2.5 billion
gigabytes of data generated every day
the planet generating data by 2015
80%
of the world’s data is unstructured. Audio.
Video. Sensor data. Social media. All represent
new areas to mine for insights.
14
OUR POINT OF VIEW:
Data is the new basis
of competitive advantage.
Leaders will:
Drive business outcomes b y applying more sophisticated
analytics across more disparate data sources in more parts
of their organization.
Capture the time value of data b y developing “speed of insight”
and “speed of action” as core differentiators.
Change the game in their industry or profession
with cognitive capability.
THEREFORE:
We have built the world’s
broadest and deepest
portfolio in data and analytics.
$ 24 billion $17billion
invested to date to of gross spend for Big Data
15,000
analytics consultants
40,000
client engagements to date
build IBM’s capabilities and analytics acquisitions, and 400 mathematicians
in Big Data and analytics, including more than
with $7 billion in organic 30 acquired companies
investment
$
1 billion
investment in Flash
1,000
university partnerships,
500
analytics patents
2/3
of IBM Research is
technology, providing and 2,215 IBM generated each year focused on data, analytics
industry-leading speed Business Partners and cognitive computing
and efficiency to
enable data to be real-
time ready for analytics
The IBM Strategy 15
We are building Watson solutions
and technologies for the
era of cognitive computing.
In January 2014 we launched the IBM Watson Group
to bring cognitive capabilities—built on technologies
like machine learning, complex algorithms and natural
language processing—to enterprises, institutions
and individuals via the cloud.
Watson technology processes information by
understanding natural language, generating hypo-
theses based on evidence, and learning as it goes.
This means organizations and individuals can
more fully understand the data that surrounds them,
and use that data to make better decisions.
1
$ billion
investment, including
2,000
engineers, researchers,
$100 million to equip developers, designers
an ecosystem of entre- and sellers
preneurs and partners
We have significantly increased analytics revenue through
strategic investments, and new skills and capabilities.
Analytics Revenue
16 billion
$
2013
2010
11 billion
$
16
02 We are
remaking
enterprise IT
for the era
of cloud.
The IBM Strategy 17
WHAT WE SEE SHIFTING:
The emergence of cloud is
transforming IT and business
processes into digital services.
At the same time industries and professions are being remade
by data, the information technology infrastructure of the world is
being transformed by the emergence of cloud computing—that
is, the delivery of IT and business processes as digital services.
8
5%
of new software is now
being built for the cloud 1/4
of the world’s
applications will
be available in
the cloud by 2016
72%
of developers already
report that cloud-based
services or APIs are
part of the applications
they’re designing
18
OUR POINT OF VIEW:
Cloud demands—and enables—
new business models.
Leaders will:
Integrate public and private clouds w
ith back-end
systems to create hybrid environments. This will create
demand for cloud middleware services.
Seek—or be required—to manage cloud environments
with the same rigor as an on-premises data center.
Use cloud t o reinvent core business processes and
to innovate.
THEREFORE:
We have built the world’s most complete cloud
portfolio, delivering our clients’ technology
and business processes as digital services.
7
$ billion
invested to date to
1,500+
cloud patents
5.5 million 8
0%
client transactions of Fortune 500
build cloud capabilities processed daily through companies use IBM’s
IBM’s public cloud cloud capabilities
15
acquired companies,
2,000
SoftLayer APIs to
100+
industry-leading Software
5,000+
private and hybrid cloud
including SoftLayer, provide a view of the as a Service (SaaS) engagements in more
for cloud infrastructure client’s environment offerings than 100 countries included
IBM Systems in 2013
The IBM Strategy 19
In 2014, we will expand our
cloud footprint and capabilities.
IBM is investing $1.2 billion to expand a massive network
of local cloud hubs for businesses worldwide, to meet
growing demands for capacity, choice, compliance and
data residency.
15
Markets planned
to open in 2014:
Australia (2) planned 2014
Brazil market expansions
Canada (2)
China (2)
France
Germany
40
total cloud data centers
India across five continents
Japan
Mexico
United Kingdom Connecting applications via the cloud
United States (2) “Cloud middleware services” are emerging to connect securely customer applications and
core enterprise systems such as finance, inventory or human resources via the cloud.
In 2014, we are opening up our entire enterprise software portfolio via BlueMix, a platform
to equip the tens of millions of corporate and web developers with an open environment
and tools to build enterprise-class cloud applications at consumer scale.
In 2013 we grew our cloud revenue 69 percent, and we exited the year
with a run rate for cloud “as a service” double that of 2012.
Cloud Revenue Cloud “as a Service”
Revenue Run Rate
$
4.4 billion $
2 billion
2013 2013
2012 2012
$
2.6 billion $
1 billion
20
03 We are
enabling systems
of engagement
for enterprises.
And we are leading
by example.
The IBM Strategy 21
WHAT WE SEE SHIFTING:
Social. Mobile. Security. They are empowering
people with knowledge, enriching them through
networks and changing expectations.
The phenomena of data and cloud are changing the arena of global
business and society. At the same time, rapidly growing mobile technology
and social business are giving birth to a new category of IT services and
capabilities, aimed at engagement with increasingly empowered individuals.
84%
of Millennials say social and
70%
of Boomers agree
user-generated content has
an influence on what they buy
5 minutes
the response time users
expect from a company
once they have contacted
it via social media
84%
of smartphone users
check an app as soon
as they wake up
80%
of individuals are willing to
trade their information for
a personalized offering
2 /3
of US adults say they would
not return to a business that
lost their personal, confidential
information
22
OUR POINT OF VIEW:
A systematic approach to
engagement is now required.
Leaders will:
Use mobile and social to increase speed and
responsiveness—and meet customers, partners
and employees where they are.
Want to personalize e
very meaningful interaction.
Need to earn continuously the right to serve
customers—which demands privacy, security and trust.
THEREFORE:
We have built a portfolio that enables enterprises
and communities to engage customers, employees
and citizens securely.
6,000
security experts,
4,300
patents in mobile,
#
1 and #1
market leader for enterprise
7of 10
top banks in the US,
3,000 mobile experts, social and security social software; market 9 of the top 10 in the UK and
2,800 social business technologies leader in security and 2 of the top 4 in Australia
experts vulnerability management* use IBM Security Solutions
8
companies acquired
12
companies acquired
25
security labs globally,
15 billion
security events monitored
for mobile capabilities for security technologies 10 security operations daily in 130 countries
like mobile messaging like web fraud detection, centers globally
for marketers and secure sophisticated malware,
mobile app delivery and device management
* IDC, Worldwide Enterprise Social Software 2013–2017 Forecast and 2012 Vendor Shares, Doc #241323, June, 2013
IDC, Worldwide Security and Vulnerability Management 2013–2017 Forecast and 2012 Vendor Shares, Doc #242465, August, 2013
The IBM Strategy 23
Our mobile, social
and security portfolio
And we are leading by example.
generated double-
digit revenue growth
in 2013.
69%
growth in Mobile
Collectively developing insights
For more than a decade we’ve used Jams—large-scale online collaborations—
to collectively define our corporate values, generate new business ideas and rally
around opportunities for societal improvement. In 2013, IBMers worldwide shaped
nine practices that translate our values into consistent actions and behaviors. These
practices are now shaping our systems for hiring, learning and management.
45%
growth in Social Business
30,000+
IBMers active in Client Collaboration
300,000
ctive IBM users on our
a
Hubs for our top 300 accounts Connections social platform
250,000
employees collaborated in an
200,000
Connections communities
online Jam to shape nine practices established by employees for
that distinguish IBMers projects, areas of expertise
or general interests
19%
growth in Security
