International Business Machines Corporation · NYSE:IBM

International Business Machines — Investor Day (May 2003)

21 slides from International Business Machines's investor day presentation, May 14, 2003

1. Slide 1: 2003 Spring Security Analyst Meeting

   2003 Spring Security Analyst Meeting May 14, 2003

2. Slide 2: Forward-looking statements

   Certain comments made in this presentation may be characterized as forward looking under the Private Securities Litigation Reform Act of 1995. Those statements involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contain

3. Slide 3: 2003 Spring Security Analyst Meeting

   2003 Spring Security Analyst Meeting May 14, 2003

4. Slide 4: IT Industry Remains a Growth Industry

   IT Industry Remains a Growth Industry IT Industry Growth vs. WW GDP Growth 15% 10% dot.com "bubble" 5% 0% -5% ’90-‘95 ’95-‘00 ’00-‘02 Future* GDP IT * Source: IBM / Government Statistics

5. Slide 5: IT Investments Drive Productivity

   IT Investments Drive Productivity U.S. EU Japan OECD 2.7% 1.9% 1.4% 52% 1.0% 47% 50% 40% ’95-’02 ’95-’02 ’95-’02 ’95-’02 Productivity Growth IT Contribution Source: OECD, Paris 2002

6. Slide 6: What Will Reignite Growth in the IT Industry?

   What Will Reignite Growth in the IT Industry?

7. Slide 7: The Next Era of Computing

   The Next Era of Computing On Demand Organizational Productivity Client / Server Personal & Departmental Productivity Mainframe Administrative Productivity 1960 1970 1980 1990 2000

8. Slide 8: The Promise of e-business on demand

   The Promise of e-business on demand An enterprise whose business processes -- integrated end-to-end across the company and with key partners, suppliers and customers -- can respond with speed to any customer demand, market opportunity or external threat

9. Slide 9: The Promise of e-business on demand

   The Promise of e-business on demand Responsive Open An enterprise whose business processes -- integrated end-to-end Variable across the company and with key Integrated partners, suppliers and customers -- can respond with speed to any customer demand, market Focused Virtual opportunity or external t

10. Slide 10: Organization-wide Integration Driving Productivity

    Organization-wide Integration Driving Productivity On Demand Business Design Organizational Deep Productivity Industry Expertise Traditional Business Design Advanced Technology Capabilities

11. Slide 11: business on demand

    © business on demand (

12. Slide 12: IBM On Demand Market Plays

    IBM On Demand Market Plays 1. Helping customers become “on demand” businesses 2. Evolving the computing model to an on demand operating environment 3. Creating flexible delivery models as viable and attractive options for accessing and paying for IT

13. Slide 13: IBM On Demand Marketplace Traction

    IBM On Demand Marketplace Traction Business Transformation Operating Environment Flexible Offerings

14. Slide 14: Where Is Value in the IT Industry?

    Where Is Value in the IT Industry?

15. Slide 15: IT Industry Landscape

    IT Industry Landscape Business Value Infrastructure Value Services & Software Server/Storage Clients Component Value

16. Slide 16: Industry Profit Migration

    Industry Profit Migration Operating Profit 1995 2000 2005 Trend* Business Value 14% 21% 33% Infrastructure Value Services & Software 28% 25% 32% Server/Storage 13% 13% 6% Clients 11% 6% 4% Component Value 34% 35% 25% *2000-2005 trend shown Source: IBM Analysis, 1Q03

17. Slide 17: Where Will IBM Play and How Will We Perform?

    Where Will IBM Play and How Will We Perform?

18. Slide 18: IBM Strategic Scorecard

    IBM Strategic Scorecard ƒ Acquisition of PwCC / formation of BCS ƒ Launch of Business Transformation Outsourcing Business Value ƒ Debut of Research’s On Demand Innovation Services ƒ Ongoing investments in Emerging Bus. Opps. ƒ Acquisition of 7 software firms, including Rational Infrastructure Value

19. Slide 19: IBM Leading the On Demand Era

    IBM Leading the On Demand Era $81B+ PwCC & Rational Acquisitions* $78B 61% Revenue 53% Software / Software / Services Services Divestitures Exits 1998 2002 * FY EST PWC & Rational

20. Slide 20: IBM Driving to Lead Market Share

    IBM Driving to Lead Market Share 1998 2002 Businesses Rank Rank ƒ Professional Services #2 #1 ƒ Strategic Outsourcing #1 #1 ƒ Information Technology Services #1 #1 ƒ Web Services N/A #1 ƒ Data Management #2 #1 ƒ Systems Management #2 #2 ƒ Server #1 #1 ƒ Storage #3 #2 Source: Industry Estimates

21. Slide 21: 2003 Spring Security Analyst Meeting

    2003 Spring Security Analyst Meeting May 14, 2003

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