NASA/IBM Partnership Milestones

2. IBM software develop the software and systems that will operate the James Webb Space Telescope. IBM ThinkPad 750C first notebook in space computers assist flight controllers in the rescue of the Apollo 13. IBM technology supports flights of the Space Shuttles Columbia, Challenger, Discovery, Atlantis and Endeavour. NASA’s Pathfinder, equipped with IBM RS/6000 lands on Mars. Astronaut John Glenn four-hour, three-orbit flight is monitored in real-time by IBM computers. IBM Helps design and build the Automatic Sequence Controlled Calculator for Harvard University. 1944 1962 1970 1982-85 1993 1997 2006 NASA/IBM Partnership Milestones

3. Our world is becoming smarter Instrumented Interconnected Intelligent 3

4. IBM Research 60% 78%Percentage of CIOs who want to improve the way they use and manage their data Of CEO’s agree IT complexity will continue to rise CIOs spend an impressive55 %of their time on activities that spur innovation 78% of CEOs put more focus on insight and intelligence of information to realize their strategy. 94% 69% Of CEOs will achieve better business results through more collaboration and information sharing Of CIOs say it is imperative to integrate Business and Technology to innovate 4

5. The real value arrives when the software capabilities are delivered in an industry context through IBM Industry Frameworks Accelerate solution design Retail-specific assets Reduce project riskReusable implementation patterns and support for industry standards Flexibility Choice of business applications and services from IBM and IBM Business Partners Return on investment (ROI)Build a differentiated retail capability and business value—one project at a time Marketing andcustomermanagement IT systems and operations Marketing andcustomermanagement IT systems and operations Information & Analytics Business Processes People Product & Service Innovation Security Operations Store andchannels Business and financeadministration Store andchannels Business and financeadministration Merchandisingand productmanagement Supply chain Merchandisingand productmanagement Supply chain IBM Retail Industry Framework 5

6. IBM provides a comprehensive framework that delivers accelerates solution deployment IBM Banking Industry Framework The framework provides a banking-specific software platform with… • Banking extensions and pre-built solution accelerators to speed deployment • Best practices and business- specific usage patterns to lower risk • Support for adoption of open and industry standards • A choice of business applications from IBM business partners • An approach to align technology with business needs Core Banking Transformation Integration Optimization Analytics Collaboration Security Resiliency Customer Care and Insight Payments and Securities Integrated Risk Management The framework gives you speed, flexibility and choice in deploying solutions while reducing cost and risk! 6

7. Manage Resources Effectively Improve Citizen & Business Services GOVERNMENT Strengthen National Security and Public Safety Ensure a Sustainable Environment Government Services, particularly social security and social services, are key services and a major budget factor for all governments. • Improve Citizen & Business Services Outcomes-based Social Services • Citizen-centered design • Integrated Case Management 7

8. Smarter transportation Software is key to addressing these challenges, transforming the planet and making businesses smarter Smarter solutions for retail Smarter energy and utilities Smarter government Smarter healthcare Smarter telecommunications Smarterchemical and petroleum Smarter insurance Smarter banking Smarter electronics 8

9. But with new models and ways of working come new challenges... Global integration and connectivity As the world becomesmore interconnected and as the paradigm of the organization shifts from multinational corporation to globally integrated enterprise, businesses can no longer afford to operate as islands. More than ever, they need to find ways to connect both internally and externally. Data everywhere As the world becomes more instrumented, the challenge is to get more out of the wealth of new information—from managing data to developing insights. New expectations for value Customer expectations have never been higher: Personalized service, delivered flawlessly. Business Software Security risks Technology has allowed work to move beyond physical locations and brand offices. It now exists on virtual platforms, across dispersed teams and players. But the more data and information organizations make available to their internal audience, the greater the risk. Differentiation through people As always, it’s the capabilities and ingenuity of the people in business that deliver results. But today, it’s about more than just those on your payroll—the greater opportunity is how well you can engage a worldwide ecosystem of employees, partners, suppliers, and customers to help create new value. 9

10. IBM software delivers virtually unmatched capabilities, integrated into industry solutions that yield quantifiable business benefits while making the planet smarter. 10

11. Backup – notes slide 3 How is IBM software helping deliver better business outcomes? Massive investments, leading innovations IBM changed the mix of the business IBM investment has shifted the company toward software • More than US$8 billion in acquisitions and US$9 billion in research and development (R&D) from 2007–2009 • US$20 billion in future acquisitions • 53 software acquisitions since 2001 • 40 innovation centers, 80 R&D labs, 33,000 developers, more than 30,000 IBM Business Partners • Focus on software solutions and business process transformation 42% 25% 40% 40% 37% 42% 35% 23% 16% 2000 2006 2009 Hardware/financing Software Services Segment pretax Income 11