IBM Research: IBM 2010 Investor Briefing
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IBM Research provides three key functions: 1) It drives IBM's major growth initiatives such as Smarter Planet, analytics, cloud computing, and growth markets. 2) Its innovations help expand IBM's margins through improvements in services delivery, software support, and efficient use of capital. 3) IBM Research has a history of leadership in fields such as artificial intelligence, nanotechnology, and cognitive computing as shown by its researchers winning 5 Nobel Prizes and 6 Turing Awards.
IBM Research: IBM 2010 Investor Briefing
- 1. Research John E. Kelly Senior Vice President and Director, Research
- 2. IBM Research: A History – and Future – of Leadership Service Platforms • Smarter Planet Service Quality • Cloud Computing • Analytics Service • Growth Markets Science Analytics es S ervic System S POWER7 Relational Database are ftw FORTRAN So BlueGene y olog Z/Sysplex c hn Te m s& U.S. Patent Leader ste Magnetic Storage Sy 17 Straight Years © 2010 International Business Machines Corporation
- 3. IBM Research: Global China Zurich Tokyo Almaden Watson Haifa Austin India IBM Research Lab Major Awards: IBM Research Presence • 5 Nobel Prize Winners • 6 Turing Awards • 14 National Medals © 2010 International Business Machines Corporation • 11 Inductees in Inventors’ Hall of Fame
- 4. IBM Research: Global and Vertically Integrated analytics services tools China Zurich Tokyo Almaden Watson cloud Haifa Austin India Workload- optimized systems & supercomputing processing IBM Research Lab IBM Research Presence nanotechnology © 2010 International Business Machines Corporation
- 5. IBM Research Differentiates IBM’s Major Growth Initiatives and Margin Expansion Smarter Planet Analytics Cloud Computing Growth Markets Margin Expansion © 2010 International Business Machines Corporation
- 6. IBM Research’s Greatest Smarter Planet “Labs” Both Smarter Transportation Smarter Energy Smarter Water © 2010 International Business Machines Corporation
- 7. The Future of Smarter Planet Optimizing a system System of systems Digitizing, analyzing, reacting Modeling and predicting outcomes Today Future © 2010 International Business Machines Corporation
- 8. Smarter Cities – New York City Strategic Planning for Predicting Traffic Jams Water Supply and Quality Fire Prevention Anticipating Collaboration w/ FDNY Energy Demands © 2010 International Business Machines Corporation
- 9. Smarter Cities – DC Water and Sewer Authority Predictive analytics models estimate the risk of infrastructure failure – enabling “fix before break” Spatial Schedule Optimization enables “while in the neighborhood “ schedule generation Data Analytics enable the identification of usage patterns, forecasting of water usage and detection of usage anomalies Water Pipes 1,200 Miles Sewer Pipes 1,800 Miles Hydrants 9,000 Valves 24,000 Catch Basins 36,000 Water Meters 130,000 Waste Water Capacity 370M Gallons / day Water Customers 600,000 Sewer Customers 1,600,000 All from conventional historical and log data! © 2010 International Business Machines Corporation
- 10. Smarter Cities – Shenyang Eco-City Research Institute y g y Shenyang Research agenda Water purity / management Energy and carbon management System-of-systems integration S t f t i t ti
- 11. Smarter Cities – Dublin: First Smarter Cities Technology Center Developing Intelligent Solutions Across a System of Systems Energy Movement Optimization Forecasting Simulation City Fabric Predictive Modelling Driving New Economic Models Significant Collaborative R&D Skills Development & Growth Water Constrained Resource Modelling Prediction & Control Competitive Advantage © 2010 International Business Machines Corporation
- 12. The Future of Analytics Multiple enormous Multiple historical datasets disparate Analyze in Real Time existing / historical Model and Predict datasets Act Extract Analyze React Streaming data at 100 Gb/s Today Future © 2010 International Business Machines Corporation
- 13. A Clinical Real-time Decision Support System Physician Support in Real-time S l Da ta Diatream rica gno ing Histo stic s Analyzes multi-modal cardiac diagnostic data per patient Integrates data; forms a holistic picture of patient’s condition Finds similar patient cohorts from EMR Summarizes findings via browser © 2010 International Business Machines Corporation
- 14. And the Volume of Healthcare Data Will Only Accelerate “Lab-on-a-Chip” 1001010100111001010010001000111101101 0001110010110001001011100011100010111 1001010100111001010010001000111101101 0001110010110001001011100011100010111 1001010100111001010010001000111101101 0001110010110001001011100011100010111 1001010100111001010010001000111101101 0001110010110001001011100011100010111 Requires pinhead size sample; takes only minutes Tests for hundreds of diseases, viruses, bacteria and biohazards “DNA Transistor” 1001010100111001010010001000111101101 0001110010110001001011100011100010111 1001010100111001010010001000111101101 0001110010110001001011100011100010111 1001010100111001010010001000111101101 0001110010110001001011100011100010111 1001010100111001010010001000111101101 0001110010110001001011100011100010111 Goal: a personal genome for $1,000 Could make possible customized medicine © 2010 International Business Machines Corporation
- 15. Massive Scale Analytics Landscape Brand Analysis Structured Mining/ Machine Data Learning Future Analytics IBM Cybersecurity Functionality Today Massive Text Scale Analytics/ Search Data Analytics Unstructured Query/ Data Search Risk Management 100GB 500GB 1TB 5TB 10TB 50TB 100TB 1-5PB © 2010 International Business Machines Corporation
- 16. Analytics – What’s Next? Acquire even deeper industry expertise The future of analytics value will be at the intersection of: – deep industry expertise – predictive models – massive scale analytics Announced today: IBM Research will double industry-leading analytics research capabilities within 2 years © 2010 International Business Machines Corporation
- 17. Cloud Computing: Innovation and Impacts Services Virtual Storage Cloud Industry solutions over the cloud Operational IT services Integrated risk management OSS and BSS Healthcare transformation prototypes Smart grid optimization Products WebSphere Cloudburst Key Future Technologies Files (Cattail) Extreme automation Image management Charts Highly differentiated platform Research (Many Eyes) as a service VM placement Slide Library Fine grained cloud security Pattern Seamless secure operations composition & EventMaps across private & public cloud 2008 2009 2010 2015 © 2010 International Business Machines Corporation
- 18. Growth Markets – Spoken Web A Parallel Web for the Masses Traditional Web Post Web Search query Text Pages Web pages Spoken Web Expert/ Farmer Hyperlinked Voice Sites Business info “Improved Post average VOICE Information yield output Questions after using pesticides I got to know from this Answers service” © 2010 International Business Machines Corporation
- 19. Margin Expansion – Services Delivery Client Value and Delivery Transformation Client Value ( + IBM Margin) Deep Analytics on client business data Quality Proactive defect prevention Productivity Client touchpoint Delivery on Hybrid Cloud visibility Initial cloud delivery Private Public Global dispatch Application assembly optimization 2005 2010 2015 © 2010 International Business Machines Corporation
- 20. Margin Expansion – Support of Software Success New Technologies “Upper” Middleware Discovery that captures operational dynamics Client-Controlled Implementing policy-driven mechanisms for: Seamless Workload Migration, Hybrid Cloud Managing and Monitoring Services, Cloud (C3) Secure Connectivity and Information Flow Developing X10 programming language: Implementation Multicore and ecosystem to support efficient parallelism for multicore and Programming Model workload-optimized systems Support of Acquisitions Visualization Text analytics Industry applications Faster/broader solver for experts; application developer tools Industry applications, cloud delivery Unified business rules language Social media analytics Advanced predictive churn capabilities New data mining and statistics algorithms built on the SPSS component framework © 2010 International Business Machines Corporation
- 21. Future of Smarter Infrastructure Security Decision Support, Operations and Control Real-time Results (Alerts, Monitoring) Trends, History, Simulation Predictive Optimization Face Capture Transport S Data Fabric System Operating System X86 X86 FPGA X86 Cell Box Blade Blade Blade Blade Unsupervised Real-Time Analytics Supervised Learning © 2010 International Business Machines Corporation
- 22. The Future of Smarter Cybersecurity Exponentially Increasing Threat – Botnets – Phishing and Spear Phishing – Spam – $1B IP Threat Cyberthreat Integration & Decision Support Real-time Security 10-40-100 Software Gb/S + Real-time Massive (pbyte) Analytics Scale Analytics 100% packet Engine inspection Stored Data & Streaming Threats Threat Profiles © 2010 International Business Machines Corporation
- 23. IBM Investment Cycle 2015 Model R&D for innovation Invest in the and differentiation Business Return to Strong Revenue Investors Cash Flow Growth Margin Efficient Use Profit of Capital Expansion © 2010 International Business Machines Corporation
- 24. At Least 2015 Roadmap $20 Operating PTI / EPS * Segment Operating PTI$ Software contributes nearly Operating EPS half of our segment profit Growth initiatives deliver $20B in revenue growth Growth markets revenue exceeds 25% of IBM’s total Enterprise productivity delivers another $8B in gross savings IBM generates $100B in free cash flow, returning 70% to shareholders '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10e '11e '12e '13e '14e '15e Hardware / Financing Services Software * © 2010 International Business Machines Corporation Non-GAAP: Excludes Acquisition-related charges and non-operating retirement-related expense Sum of external segment pre-tax income not equal to IBM pre-tax income 2000 & 2001 segments not restated for stock based compensation
- 25. © 2010 International Business Machines Corporation
- 26. Certain comments made in the 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 contained in the Company's filings with the SEC. Copies are available from the SEC, from the IBM web site, or from IBM Investor Relations. Any forward-looking statement made during this event or in these presentation materials speaks only as of the date on which it is made. The Company assumes no obligation to update or revise any forward-looking statements. These charts and the associated remarks and comments are integrally related, and are intended to be presented and understood together. In an effort to provide additional and useful information regarding the Company’s financial results and other financial information as determined by generally accepted accounting principles (GAAP), certain materials presented during this event include non-GAAP information. The rationale for management’s use of this non-GAAP information, the reconciliation of that information to GAAP, and other related information is included in supplementary materials entitled “Non-GAAP Supplementary Materials” that are posted on the Company’s investor relations web site at http://www.ibm.com/investor/events/investor0510/. The Non-GAAP Supplementary Materials are also included as Attachment II to the Company’s Form 8-K dated May 12, 2010. © 2010 International Business Machines Corporation
- 27. © 2010 International Business Machines Corporation