IBM ebusiness Hosting Services

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IBM e-business Hosting Services

• The Cisco Powered Network and Dedicated Hosting
  Architectures

January 2002
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Agenda

• The Value of Outsourcing
• Why IBM Global Services for Hosting?
• Why Cisco?
• Cisco Powered Network and the Cisco Dedicated
  Hosting Architecture
• Summary

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• Why outsource your Web environment?

• Key business drivers
• Focus resources on core strategic initiatives
• Reduce upfront investment, conserve capital
• Transfer financial and technical risk to provider
• Time-to-market advantage
• Fast path from strategy to implementation
• Flexibility to respond quickly to market changes
• More cost-effective than in-house solution
• Minimal increase in staff and overhead
• Benefit from provider's economies of scale in
  infrastructure investment and 24x7 operations

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• Why outsource your Web environment?

• Key technical drivers
• Access to specialized Internet technology and
  skills
• Knowledgeable IT talent
• Critical technologies --security features, high
  availability, applications
• Enhanced reliability
• Hardened 24x7 Internet data centers
• Advanced server, application monitoring
• Geographically dispersed load balancing
• Performance optimization
• Access to high-bandwidth Internet connectivity
• Burstable, scalable capacity

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Hosting Advantages

• according to Morgan Stanley...

Companies gain 3 significant benefits from hosting
Access to skills
Better Performance
Lower Costs
Improvement/(Reduction) due to hosting In-House
Cost/Server 35K Hosted Cost/Server 7K (80)Re
v from Reduced Downtime/Server 52K Employee
Productivity 7K
Improvement/(Reduction) due to hosting Total
Server Downtime (88) Total Employee Downtime
(92) Downtime Incidents
(87) Servers Affected
(11) Employees Affected (44)
Demand for critical web skills is growing faster
than for any other occupation today. The number
of resources to maintain a hosted site is
significantly lower. Resources Dedicated to Site
Emp In-house Hosted
0-5 29 45 5-10 21 36 10 50 18
Savings achieved through hosting expertise and
economies of scale allow companies to improve
their IT return on investment.
Value of hosting skills is also achieved by 24x7
service level agreements and gaining access to
additional managed services expertise.
Sharp reduction in downtime, and the associated
increases in productivity and potential reve-nue
provide hosted companies with a clear business
advantage.
Source "The Internet Hosting Report," J. Camp,
A. Henry, Morgan Stanley Dean Witter, November
2000
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• IBM Global Services 2001 Earnings Performance

2Q Results
3Q Results
Revenue 8.7B, 13 _at_CC
Revenue 8.7B, 9 _at_CC
Signings 16B Backlog 95B
Signings 10B Backlog 97B


Services 15 Maintenance 3
Services 11 Maintenance 1

• Strong signings and backlog growth
• Second largest signings quarter
• 1 billion of Web Hosting Services signings
  year-to-date
• Customer focus on cost savings and Infrastructure
• Outsourcing and e-sourcing up 15
• Continued strength in Asia Pacific outsourcing
• Web Hosting Services revenue more than doubled

• Backlog continued to grow
• 1.7 billion of Web Hosting Services signings
  year-to-date
• Strong outsourcing pipeline
• Outsourcing and e-sourcing up 13
• Web Hosting Services revenue up 50
• Continued margin improvement

Source IBM 2001 Earnings Presentation
www.ibm.com/investor
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IBM Global Services Capabilities

• Americas

e-business Hosting Centers
21 Centers
39 Centers
10 Centers
8 Centers
92 Data Centers 175 Processors 51,558 MIPS 216
Terabytes 10,728 M/R Svrs
201 886 361,611 1,915 56,935
48 Data Centers 290 Processors 121,000 MIPS 432
Terabytes 19,153 M/R Svrs
61 Data Centers 421 Processors 189,053 MIPS 1,267
Terabytes 27,054 M/R Svrs
Processing Capabilities
Managed Desktops
274,869
1,459,117
570,500
613,748
Customer Service Centers
24 Centers 2,503,000 Calls
71 Centers 19,835,000 Calls
23 Centers 11,400,000 Calls
16 Centers 5,932,000 Calls

• 500,000 non-IBM machines under management
• 20,000 e-business engagements
• 2,100 Hosting Clients
• Leader in Web Privacy and Security Services

• 138,100 professionals in 60 countries
• 201 Data Centers with 361,611 mips
• 85B contract backlog 33B revenue in 2000
• Unparalleled capability for major Web events
• International Sales Organization

Global At A Glance
3Q 2001
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IBMs Commitment to the Hosting Business

• 4 billion investment
• 35 e-business hosting centers

IBM Data Centers are Cisco Powered
Networks.
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Cisco Powered Network

• Cisco partners with network services providers
  who offer the highest levels of quality and
  reliability
• IBM is an authorized Cisco Powered Network
  service provider incorporating the latest in
  Cisco routing and switching network technology
  into its advanced e-business Hosting Centers

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IBM
Leader in e-business

• The worldwide leader in servers, software,
  services and technologies for e-business
• Complete end-to-end e-business solutions
  leadership with unparalleled industry expertise
• 150,000 experienced e-business consultants with
  over 25,000 engagements worldwide
• Trusted partner with the ability to work with
  companies on a world wide scale
• 5.6 billion RD investment, 5.6 billion in
  capital expenditures and 500 million in
  strategic acquisitions

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Cisco
Leader in Internet expertise

• The worldwide leader in networking for the
  Internet
• Complete end-to-end networking product leadership
• Consistently rated 1 in networking industry
  customer satisfaction surveys
• Horizontal integration model providing customers
  best-of class solutions

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• e-business Hosting Environment

Double security layer and high availability
options available.
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Cisco Dedicated Hosting Architecture
Cisco DHA is a set of network equipment,
dedicated for each enterprise customer, for
deployment in a cage or rack in IBMs data
centers.
Basic bundles rest are options
Small
Large
Medium
Cat 6509
Cat 4006
Layer 2 Switch
Cat 2980 GA
Content Switch
CSS 11155
CSS 11151
CSS 11051
PIX 535
Firewall
PIX 525
PIX 525
SSL Termination
SCA 11000
SCA 11000
SCA 11000
Content Engine
CE 560
CE 560
CE 507
Intrusion Detection
IDS 4230
IDS 4230
IDS 4230
Back-End Router
2651
2651
2621
Monitoring
HSE
HSE
HSE
Multiple ISPs (BGP)
7200
7200
Wireless Support
CTE 1400
CTE 1400
CTE 1400
Additional Firewalls
PIX 535
PIX 525
PIX 525
Additional L3 Functionality
2621
3640
3620
Each Bundle Also has a High Availability Scenario
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Benefits of Cisco Dedicated Hosting Architectures
Cisco DHA Value Proposition
DHA comes with easy to use deployment
guides Cisco is the single point of support for
all networking issues HSE Management Product
makes monitoring and daily management easy Cisco
has industry-leading L2-L7 products
Ease of deployment Single point of support Ease
of management Best-of-breed products
IGS provides Cisco Network Bundle (DHA) to
Enterprise customer
Facilities Hosting/ Co-location Service
If Enterprise Wants to Outsource
DHAs are prearchitected, making it easier for IGS
to design and install the enterprise
web/e-commerce site The DHAs have been tested
and verified for inter-operability. This enables
IGS to offer industry leading SLAs. Cisco has
industry-leading L2-L7 products
Faster time-to-service Better SLAs flexible,
scalable, and reliable Comfort factor all
Cisco equipment
Managed Hosting/ e-business Hosting/ e-sourcing
IGS or customer- owned equipment.
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Summary

• Cisco is the worldwide leader in networking
  components for the Internet
• Managed Hosting Services is IBMs core business
• A network of multiple Tier 1 backbones that is
  global, fast, and highly reliable
• Flexible web hosting infrastructures
• Proactive and comprehensive management service
  options
• Integrated repeatable solutions by industry
  leaders
• Flexibility to add or subtract services and
  support as needed

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The logical choice
IBM and Cisco