Competitor Profile Template

Competitor Analysis Template

Contents

• Executive Summary

• Company At a Glance− Quick facts about the company;

Latest financials− Financials by operating units,

geography, verticals, etc− Management

Structure/Organization Structure (BU Org)

− Competitive Landscape/Business mapping

− Competitive Market Position − Key Updates

• Strategic Analysis− Competitor’s Evolution − Objectives, Implementation, Plans− Major Strategic Shift*− Go To Market− Mergers and Acquisitions− Partnerships and Alliances*− SWOT: Overall; Region Specific;

Customer Group Specific (SMB / Enterprise); Vertical Specific; Product/BU specific2April 10,

2023

• BU-wise Analysis (in detail)− Quick View; key Financials− Strategic significance− Product/Service Offerings − GTM− Positioning Maps for key/strategic

products/offerings− Competitive Comparison− Analysts Comments− Outlook for the BU

• Comparative Performance (company peer comparison)

− Key Financials: Vertical wise; Customer Group wise; Geography wise

− Key Performance Indicators’ Comparison

− Versus Company• Analyst Comments• Competitor Outlook• Key Takeaways/Recommendations• Backup Slides

Executive Summary (I)

3April 10, 2023

A. Business OverviewOne of the global IT leaders, IBM operates in major business segments of IT hardware (STG), software, services and solutions (IGS) as well as provides financing to its customers (GF)• IGS is the major contributor to revenue (53%) and contributes to 37% of pre-tax

profits• Software is the fastest growing and most profitable business group in IBM with

revenue contribution of 20% and pre-tax profit contribution of 40%• After a drop in revenue in 2005, with the divestment of its PC division, IBM saw a

marginal increase in revenue in 2006 of 0.3%

Also, IBM has significant presence across the IT value chain, globally – right from research and design to loan and lease financing customer and partner purchases; as such is faced with myriad pressures from different competitors, customers, channels, etc

B. Major Trends

Among the major trends facing IBM are:• Demand for standardized products overtaking demand for leading tech,

customized products• Growth of SMB• Demand for vertical focused products, services and solutions • Demand growth from emerging markets• Also increase in competition from emerging markets• As compared to its peers, IBM is facing the pressure of low rate of revenue growth

XYZ Corp.At a Glance

XYZ Corp. Competitor Overview

Latest Financials – Q406

$81.2 $89.1 $96.3 $91.1 $91.4

9.7%8.1%

(5.4%)

0.3%

$70

$75

$80

$85

$90

$95

$100

2002 2003 2004 2005 2006

-10%

0%

10%

20%Revenue Growth Y/Y

29.732.5

35.5 36.5 38.3

3.2 1.7 2.0 2.2 3.5

13.3%

21.3%

10.5%

46.6%

7.6%

0

5

10

15

20

25

30

35

40

45

2002 2003 2004 2005 2006

0%

40%

80%Gross Profit Net Income Growth

Net Profit ($B) & Y/Y Growth (%)

Revenue ($B) & Y/Y Growth (%)

Quick Facts

One of the top 3 global IT players

HQ: Armonk, New York, United States

Employees: 330,000

Portfolio: Mainframes, servers, storage, peripherals, IT services, software, microelectronics

Sales Channel: Own sales force and one of the largest partner network

R&D: 6.0% of sales

Competition: H-P, EDS, Microsoft, Accenture, Fujitsu, Sun, NetApp

Presence: Global – in more than 150 countries

Management: Samuel Palmisano – CEO & Chairman; Mark Loughridge - CFO; J Bruce Harreld – Marketing SVP

Performance:

XYZ Corp. Revenue by Operating Units

49% 53%

28% 25%

20% 19%

2% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q405 Q406

Global Financing

Software

Hardware

IGS

Revenue % by Operating Units (Revenue in $B)

$12.0 B

$6.9 B

$4.9 B$0.6 B

Y/Y Growth %

6.4%

4.3%

15.3%

3.3%

• IBM holds strong ground in Services and Software, the biggest chunk of IT spend

• IBM continued to improve its software portfolio as it offers better margins than its hardware or services business

• Besides, IBM’s recent acquisitions in software are also believed to be driving IBM Global Services’ (IGS) Growth, as customers are buying software as a solution that requires support from services

$12.8 B

$7.2 B

$5.7 B$0.6 B

XYZ Corp. Revenue by Geography

43% 43%

34% 35%

18% 18%

5% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q405 Q406

OEM

AP

EMEA

Americas

Revenue % by Geography (Revenue in $B)

$11.2 B

$9.3 B

$4.8 B

$1.1 B

$10.5 B

$8.3 B

$4.5 B

$1.1 B Y/Y Growth %

6.7%

12.0%

6.7%

-

• IBM continues to invest to build capabilities in the BRIC countries to:

– Address fast growing domestic opportunities and

– Enhance IBM’s globally integrated operations• IBM reported strong performance in EMEA with growth coming from Italy, UK and

France• Asia growth was driven by 4Q06 revenue increase in Japan

XYZ Corp. Revenue by Vertical

28% 29%

16% 14%

12% 12%

9% 10%

10% 10%

18% 19%

5% 4%2% 3%

0%

20%

40%

60%

80%

100%

Q405 Q406

Other

OEM

SMB

Communications

Distribution

Industrial

Public

Financial Services

Revenue % by Vertical

• Financial and SMB companies make up a large chunk of total IBM revenue

• IBM sees SMB as an attractive market and is adopting various initiatives to increase its presence in the segment

Y/Y Growth %

4.2%

8.9%

-

24.7%

10.3%

-

6.7%

13.0%

XYZ Corp. Management Structure

Paul M.HornSVP;

Director, Research

Appointed recently to form major alliances

Ex Citibank VP and Ex- IBM Head of FSI

Brought on-board in early 2006 to gain

traction in APJ market

Ex-Hewlett-Packard

VP Managed Services, TSG

Brought in this position to give impetus to drive innovation across IBM

Steve MillsSVP; Group Executive, Software

William M.Zeitler

SVP; Group Executive, STG

Virginia M. Rometti

SVP GBS, IGS

Mark LoughridgeSVP & CFO

John E. KelleySVP

Technology & IP

Linda S. Sanford

SVP Enterprise On Demand

Transformation

Robert W. Moffat Jr.

SVP Integrated Operations

J. Bruce Harreld

SVP Mktg & Strategy

Samuel J. PalmisanoChairman

President & CEO

Michael E. Daniels

SVP GTS, IGS

Donny SabahGM, Rational

Doug ElixSVP; Group Executive,

S&D

Nicholas M. Donofrio

EVP, Innovation & Technology

Dave TurekVP, Deep

Computing

Ravi MarwahaGM, Global Business Partners

Kathleen Smith

VP; Emerging Business

Markets, STG

Richard D. Michos

VP, Global SalesSMB Solns &

Services

Richard A. Stomp

VP, Global Telecommunicat

ion Industry

Barry RudolphVP; System

Storage

Linda S. Sanford

SVP Enterprise On Demand

Transformation

Rich LechnerVP,

Virtualization

Steve SolazzoGM, Global SMB

Has returned to IBM from

Lenovo. Hopes to woo back

Lenovo partners to the IBM fold

Mike KozelVP, Global Business Partner

Strategy

Key Stakeholders for Sales

XYZ Corp. Operating Structure

Service Lines- Categorized on the basis of Operating Groups

XYZ is a diversified company but moving toward services and software. Its offerings are categorized under Five operating groups which are further organized into a total of 17 industries.

www.ibm.com

IBM Operating Units

IBM Corp

Software$18.204 B

Hardware$48.247 B

Global Services$22.499 B

Global Financing$2.379 B

Other$0.094 B

TS Server DB

MS Storage Tivoli

BPO Semiconductors Lotus

WebSphere Fastest Growing and

have highest marginsGrowth : “X” %Margin :”Y” %

Growth closely linked with sales of Software

-10%

20%

XYZ Vs. Competitors Business Mapping

Servers Storage PCSemiconductor

s

Printing System

s

Software

IT Service

s

Security

Solutions

Financing

IBM

EDS

XXX

Microsoft

SAP

Oracle

EMC

R R R R R R RRRRRRRR

RR

RRR

R R

Tick signifies the Presence of the Vendor in a Product Segment

Arrow represents movement into or out

of a business area

Have moved out of this business ; Joint venture with Ricoh ; click on the

arrow for details

XYZ Corp. Key Updates

Key facts should be highlighted in text-dominated slides

Date UpdateJan ‘07 IBM announced the creation of a joint printing business with Ricoh which would

eventually control IBM’s entire Printer Systems Division

IBM partnered with LeftHand Networks. The partnership will enable LeftHand Networks’ device management, storage clustering, and remote copy SAN/iQ software capabilities to be installed on IBM System x3650 servers, converting them into a scalable iSCSI storage solution that offers a number of enterprise-class features

Dec ‘06 IBM worked with Panasonic to create a web platform for the company’s Plasma TV customer support program

Nov ‘06 Acquired Palisades Technology Partners to increase portfolio of GTS divisions

Oct ’06 Moved its global procurement division to Shenzhen, China. This is the first time IBM has relocated a division of corporate HQ overseas

Restructured its Services business. It has taken the networking services piece of IGS & turned it into a new business unit, ICS (Integrated Communications Services)

Began detailing a new approach in designing computer processors, with specific features for verticals – the first target being the Financial services vertical

Action buttons links certain key facts between 2 slides

XYZ Corp.Strategic Analysis

XYZ Corp. Evolution

14April 10, 2023

1911

1950

1960

1980

1990

2000

Company established. Early Growth

Growth in Business Computing

Mainframe Phase Unbundling of software and services from hardware Anti-trust litigation Tremendous success with System/360, System/370 series• Mainframe business consolidation• PCs for businesses• IBM lost out to rivals to tap the PC market growth with its focus on

mainframes• Recorded one of the largest loses in its history• Revamped business mix to increase its focus on software & services• Started building software portfolio with Lotus acquisition• Begun increasing its patent portfolio, which helped in tech collaborations Focus on services, especially on consulting arm – acquisition of PwC;

Sold its low margin PC business Also focused on building its high-value chips and hardware technologies Made efforts to align R&D org with its product development group to

improve return on research investment; Majority of research effort was on software

Began focus on SMB and Open Sources markets

Evolution Option I

XYZ Corp. EvolutionFrom a Storage Vendor to an Information Infrastructure Company

15April 10, 2023

1979

Computer Furniture

1981

Supplier of Add-on Memory

boards to Intel and other IT companies

1987

Solid-state Disk Storage System for

Minicomputer

1989

Storage Solutions Supplier

1993

Exclusive focus on Disk Storage

1994

Heavy focus on Software functionality

2002

Open, Platform Independent Storage Consulting Services

2003

Entry into the SMB Market

2007

“One EMC” – Integration of

acquired entities

In-organic growth through

Acquisitions to pursue its ILM

strategy

1991Storage Company

2002 2004Storage & Information

Management

Information Infrastructure

Pure-play Storage Vendor

Information Infrastructure

Company

Evolution Option II

XYZ Corp. Game Plan

16April 10, 2023

Re-design Products & Services Portfolio

From One-stop IT/Computer Technology Player

High-value Add

Innovative

Technology

Provider

Strategic Aim

Key Enablers

Past State

Organizational Changes

Restructuring GTM

Processes

Strategy Option I

XYZ Corp.’s Strategic Objectives

Be a technology leader and attract high value

customers for increased growth and profitability

Create more flexible and agile customer-

centric organizational

processes

To invest in sales and marketing

resources, targeting the faster growing

regions, sectors and technologies

Drive growth through IBM Labs

and Microelectronics’

expertise

Leverage core products and

services in high-value solutions

such as SoA and OnDemand

Acquisitions and Divestitures to drive

focused portfolio and growth

Portfolio

Re-designing internal

and external facing

processes

IBM’s Core Objective

• Investments in high growth geographies; in global sales and delivery channels in software and sales; in software growth through internal skills and acquisitions

• Optimize its resources and processes to increase productivity; improve flexibility and scalability

Establish and maintain

technology leadership at

reduced investments

Strategy Option I

XYZ Corp. Strategy Elaborating Core Competitor Strategies

IGS – Enterprise application

support; SoA

Geographic – BRIC;

Customers - Presence in all IT spend segments

STG – SMB, Technology leadership

Software - SoA


STG – SMB, Technology leadership

Software - SoA

IGS – Enterprise application

support; SoA

Geographic – BRIC;



Objectives

• Increase profitability while sustaining growth

• Be #1 IT company

• Maintain perception of leading-edge technology & services to attract high margin customers

Strategy Option II

XYZ Corp. Strategic ShiftKey Elements Underscoring the Shift

Strategy Earlier Strategy Now

Pro

posi

tion

GTM

Targ

et

Mark

et

Optional

Key take-aways/Implications to :

Use this framework if there has been a significant shift in a company’s strategy

XYZ Corp. Go-To-Market plan

Product Categories

Sales & Distribution channels

Key Alliances and Partners

Key Marketing Initiatives

Key Customer Segments

Product Group 1 Product Group 2 Product Group 3

Direct Sales Force

Enterprise Commercial EntrySMB

Marketing & Sales• Campaign • Market mix modeling• Pricing analysis• Research & Development

Advertising & Sales Promotion• Advertising Channels• Advertising Spend• Sales Promotion Activities

Branding/Positioning• Mission/Vision Statement• Positioning Vs Competitors

Distributors VARS Resellers OEMs

Key Alliances

XYZ Corp Acquisition Roadmap

Driving XYZ Corp. towards Information Infrastructure

XYZ Corp. Strategic Partnerships

• Since 2002; To work on chip-making technologies based on a 22-nanometer and 32-nanometer processes

• Early research on new chip technologies including transistors, chip connection, packing and lithography

• Since 2001 - to work on the Cell microprocessor design, and its underlying SOI (silicon-on-insulator) process technologies in 90 and 65 nanometer

• Now a semiconductor research and development alliance to investigate, identify and commercialize new technologies for consumer and other applications.

• Since 2002; To cooperate on blade system and chassis development, networking infrastructure and comprehensive blade system management solutions

• Later in 2004 agreed to open up their blade server specifications to attract third-party vendors to develop thin computing machines based on their designs• Since 2005; IMS (IP Multimedia Subsystems) focused on IBM blade architecture

• To work on a new class of blades that would meet the specific and demanding data flow, reliability and security needs required by the network equipment marketplace

• IBM, Nortel set up a Joint Development Center, where personnel from both companies can work on this and other select projects

http://www.intel.com/index.htm?iid=homepage+hdr_logo

http://www.sony.net/

http://www.nortel.com/

XYZ Corp. Delivery Channels

Objective Targeting customers better, especially the mid market, through SOA partner programs and packaged ‘services offerings’ through channel partners to extend the reach of IGS capabilities More Detail

IBM Corp.

Sales & Marketing Channels

Direct Sales Force

Value Added Resellers

Global Partner Network

OEMS

• Has one of the largest partner communities – more than 90,000 partners worldwide; including over 100 strategic alliance partners such as Cisco, SAP, Red Hat and Novell

• IBM attributes close to $32 billion of its overall $91billion in revenue (about 35%) to its partners

• IBM’s new partner programs are helping the company from being a big and expensive IT provider to being a vendor that offers affordable solutions for SMBs

• Ex: IBM’s Software Value Incentive program rewards partners for each part of the sales cycle to improve partner alignment in deals and improve SMB customer experience

• Ex: PartnerWorld Express Advantage allows IBM partners to link their applications and services with IBM solutions, including IBM’s financing options, and co-market them to the SMB segment

• x

Support Organizations:

Ibm.com, Telemarketing

• Helping IBM reach the SMB market more effectively as compared to the partner channel

XYZ Corp. Corporate SWOT

Strengths Weaknesses

• Leadership• Partner Network• Technology Leadership• Etc.

• GTM• Time to Market• Etc.

Unique Differentiators• Value Prop: “Consolidate, migrate, protect and manage business infrastructure” • Defines SMB as companies as Small (<200 employees ) and Mid (200-3500 employees)• Major Solution offers

−Server, storage consolidation and virtualization−Unix migration; MS Exchange server migration−Business continuity, high availability, security, data archiving for regulatory compliance−Server, storage, client, networking management

• Leverage strength in PC business to drive growth in servers, storage, imaging and printing products

Source :

Covers what sets this company apart from the rest of the players in the industry (and outside the industry as well, if it is a well diversified company)

SWOT Option I

XYZ Corp. Corporate SWOT

• Portfolio pricing controlled by sales • Well-trained and compensated sales force • Mainframe expertise• Global storage account managers• Leading vendor in storage solutions, with

strong focus in software• Acquiring software and services companies to

expand portfolio and market reach • Sells solutions with partners (Oracle, SAP, etc.)• Partnership with Dell-CLARiiON Sales

• Narrow IT consulting experience and geographical reach compared to Services

• Acquisitions creating integration challenges• Cannot provide single vendor “end-to-end”

business infrastructure solutions

• Still widely known as a storage vendor within the enterprise management space

• High reliance on high end mainframe based storage system

• Price pressure and commoditization of HW and Storage.

• IBM acquisitions to impact EMC’s newly formed security initiatives

• With acquisitions spree, EMC could lose market perception as a storage vendor

• ’s reliance on HDS for high-end storage • Recent acquisitions (data classification,

security) provide access to new customers • Expanding SMB through Channel• Velocity program provides unified partner

infrastructure• Ability to integrate security software with

hardware offerings to provide secure information across ILM solution

• < ILM + BI -- need copy and validation>


ThreatsOpportunities

SWOT Option II

XYZ Corp.’s Strengths

• Portfolio pricing controlled by sales • Well-trained and compensated sales force • Mainframe expertise• Global storage account managers• Leading vendor in storage solutions, with strong

focus in software• Acquiring software and services companies to


• SMB product portfolio designed to be small and focused

• Offering a dedicated website to facilitate and provide tailor-made solutions and support to the SMBs

• Low pricing of products, catering to the price sensitive SMB market

• Sales channel made up of direct (Direct Marketing Resellers) and indirect (Value Added Resellers), catering to SMBs with IT staff (through DMR) and non-IT staff (through VAR)

• Partnership with Dell-CLARiiON Sales

• Excellent storage services and support capabilities for EMC hardware and software

• Strong remote storage problem resolution for EMC hardware

• Server “agnostic” – can place storage solutions in any environment

• Expensive but willing to negotiate to win sale

Corp

ora

teC

ust

om

er

Segm

ent

– (S

MB

)Pro

duct

\ B

U

(Serv

ices)

Vert

ical

Regio

nal

• Leading vendor in Financial Services• High market awareness in MDI and CME

also

• Leader in the high-end external disc storage market in the APeJ region. (APJ)

Optional

27

April 10, 2023

XYZ Corp.’s Weaknesses





• Newcomer in the SMB arena – channel expertise for this market not fully developed

• Gaps in the feature set such as NAS and security in the Insignia product line

• Perceived as expensive in the SMB market• Strategy to employ VARs (Value Added Resellers)

and DMRs (Direct Marketing Resellers) may overlap with mutual interests, leading to possible conflicts.

• New range of SMB products not “familiar” to the users in SMB market. Non-IT savvy SMB users may shy away from switching over

• Support structure not flexible; only one real support offering (Global Proactive 24x7 support)

• Global Proactive 24 does not offer proactive account services except for “phone home” capabilities

• 6 hour Call-to-Repair – not offered as a packaged service by EMC

• EMC storage-only hardware and software support• Not able to provide remote monitoring and

management for servers or networks• Limited geographic scope

Corp

ora

te

Regio

nal


• Cannot provide single vendor “end-to-end” business infrastructure solutions.

• Still widely known as a storage vendor within the enterprise mgmt space

• Slowest growing region (APJ)

Cust

om

er

Segm

ent

– (S

MB

)Pro

duct

\ B

U

(Serv

ices)

Vert

ical

Optional

28

April 10, 2023

XYZ Corp.’s Opportunities

• ’s reliance on HDS for high-end storage • Recent acquisitions (data classification, security)

provide access to new customers • Expanding SMB through Channel• Velocity program provides unified partner

infrastructure• Ability to integrate security software with hardware

offerings to provide secure information across ILM solution


• Partnership with Intel provides expanded customer and market reach

• Expanding SMB focus by fueling growth through channel partner

Corp

ora

te

Regio

nal

• Marketing broader solution outside of network management space – expanding breadth of offering to compete with Software portfolio.

• Differentiate compliance and governance offerings with ILM focus

• Security has been identified as a Billion $ business in the next 2 – 5 years.

• Expansion plans in India and China (APJ)• Focus on SMB market (APJ)

Vert

ical

Cust

om

er

Segm

ent

– (S

MB

)Pro

duct

\ B

U

(Serv

ices)

Optional

29

April 10, 2023

XYZ Corp.’s Threats





• Heavy reliance on partners – specifically Dell• Partnership with Dell creates conflict of interest

with EMC Insignia Partners• Dell storage services may lead to customer dis-

satisfaction <may need evidence to support this claim>

Corp

ora

te

Regio

nal

• Open-source (Xen) virtualization software puts VMware’s continued success in jeopardy.

• EMC ILM definition and product mix not widely accepted.

• With the spate of acquisitions ,EMC could be spreading itself too thin with increased risk of the company and sales force losing focus on the core storage business..

• Potential of EMC defocusing SMARTS

• No specific points

Cust

om

er

Segm

ent

– (S

MB

)Pro

duct

\ B

U

(Serv

ices)

Vert

ical

Optional

XYZ Corp. Expectations• IBM expects its Software business to continue to be the strong growth driver

– IBM is expanding its existing software offerings, especially those aimed at business users such as Lotus Connections, Lotus Quickr, Sametime, and WebS ere Portal Express

• IBM expects to gain in server market targeting entry and midrange customer segment with benefits such as consolidation through virtualization

– IBM BladeCenter JS21 Web serving farm server, and System p5 560Q midrange Linux server are examples of product introductions for the target segment

• IBM continues to invest in high value-added business solutions like enhancing their global development center capabilities in India & China to leverage the Webify acquisition & to accelerate SOA

• The first Power6 systems, lower-end models, are due in mid 2007. Power6 is expected to run at 4-5 GHZ with similar power consumption as Power5; an improved memory controller; improved SMT capabilities; a new floating-point engine, etc

• TBR believes that IBM will continue to focus on BRIC as an area of growth for its main businesses of software, services and hardware, including its System z mainframe

• IBM, with the help of AMD, Sony and Toshiba, developed a new material to build a critical part for 45nm transistors. IBM expects this new material will lead to smaller, faster and more efficient chip circuitry than before

• IBM plans to double the performance of its microprocessors in 2008 by using smaller, more efficient memory

– IBM plans to use DRAM instead of SRAM as the embedded memory cache built onto each chip, according to a paper presented at the ISSCC (International Solid State Circuits Conference) trade show in San Francisco

XYZ Corp. Future Outlook

• Text information• Secondary resources analyst opinion or company’s own future plans/expectations

32April 10, 2023

XYZ Corp.BU Analysis

XYZ Corp.BU I overview

Latest Financials – Q406

$81.2 $89.1 $96.3 $91.1 $91.4

9.7%8.1%

(5.4%)

0.3%

$70

$75

$80

$85

$90

$95

$100

2002 2003 2004 2005 2006

-10%

0%

10%

20%Revenue Growth Y/Y

Net Profit ($B) & Y/Y Growth (%)

Revenue ($B) & Y/Y Growth (%)

Quick Facts

One of the top 3 in the global IT Outsourcing

Portfolio: Mainframes, servers, storage, peripherals, IT services, software, microelectronics

Sales Channel: Own sales force and one of the largest partner network

R&D: 6.0% of sales

Competition: H-P, EDS, Microsoft, Accenture, Fujitsu, Sun, NetApp

Presence: Global – in more than 150 countries

Management:

Performance:

29.732.5

35.5 36.5 38.3

3.2 1.7 2.0 2.2 3.5

13.3%

21.3%

10.5%

46.6%

7.6%

0

5

10

15

20

25

30

35

40

45

2002 2003 2004 2005 2006

0%

40%

80%Gross Profit Net Income Growth

BU I Strategic Significance & Goals

Core Strategy Implementation Desired Outcome

Leverage R&D in chip technology to come out with high end business solutions

- Bundling initiatives such as SoA and Information on Demand, which combine hardware, software and services

- Improve sales of more profitable hardware products such as System z and System p

Gain and maintain leadership in Blades market

- Sales and marketing initiatives including open source initiatives to bring out best-in-class solutions

- Capture strong growth in blade systems

Build storage solutions with focus on differentiation through storage management and integration software

- Tie-up with NetApp for mid-range systems

- Capture SMB market

Strategic significance of the BU•Leveraging lead in technology•Focus on growth segment of SMB and growth market of blades

Significance of the BU in corporate strategyHow it fits into the overall company’s goals

35

April 10, 2023

BU I Focus areas and strategy

Launch date

Product: significance

Evolution Performance Target customers


Most important product lines and their significance

Key segment performance comparison

0

20

40

60

80

100

120

0 1 2 3 4 5

revenues

HP

IBM

36April 10, 2023

Key drivers of growth:

Key: 1=WW servers 2=x86 3=blades 4=windows 5=Linux

Size of the bubble represents market

share size. Along the y axis is revenues

and x axis are different mkt

segments

BU I Go-To-Market plan

37April 10, 2023

Product Categories

Sales & Distribution channels

Key Alliances and Partners

Key Marketing Initiatives

Key Customer Segments

Industry 1 Industry 2 Industry 3

Direct Sales Force

Enterprise Commercial EntrySMB

Marketing & Sales• Campaign • Market mix modeling• Pricing analysis• Research & Development

Advertising & Sales Promotion• Advertising Channels• Advertising Spend• Sales Promotion Activities

Branding/Positioning• Mission/Vision Statement• Positioning Vs Competitors

Distributors VARS Resellers OEMs

Key Alliances

38

April 10, 2023

BU ISWOT

• Portfolio pricing controlled by sales • Well-trained and compensated sales force • Mainframe expertise• Global storage account managers• Leading vendor in storage solutions, with

strong focus in software• Acquiring software and services companies to










• ’s reliance on HDS for high-end storage • Recent acquisitions (data classification,

security) provide access to new customers • Expanding SMB through Channel• Velocity program provides unified partner

infrastructure• Ability to integrate security software with

hardware offerings to provide secure information across ILM solution



ThreatsOpportunities

39April 10, 2023

Analysts’ Opinion

“Software will contribute at least 22 percent of total revenue in 2008 from about 20 percent in 2006… Going forward, we believe these software acquisitions will help support top line growth, margin expansion, and free cash flow, unlocking hidden shareholder value”

- Benjamin A. Reitzes, UBS Investment Research

“On Lotus Connections: These social software applications have a high "value-to-effort" ratio, as is evidenced by the popularity (and value) of consumer space equivalents. Through 2008, these capabilities will give IBM a significant competitive edge over mainstream competitors that still lack them.”

- Gartner News Analysis

“Having a strong services business helps IBM sell everything from servers and storage to new software. Software and services are very complementary. They've made some key acquisitions in the last year, and they're not overspending on them. They're buying companies with established businesses that aren't too big, but that can grow”

- Doug Christopher, Crowell, Weedon & Co.,

BU Outlook


Strategic significance of BUs

41April 10, 2023

Leveraging core products and servicesIncreased vertical focus to offer vertical-specific solutions

IGS

STGSoftware

Corporate Strategy

Build Industry Focused solutions

Bundle business insight and technology across 17 industries and six horizontal solutions.

To be “One Stop Shop” IT solution provider for the enterprise market

Drive revenue through utilizing IBM

Labs, Microelectronics’

Engineering and R&D expertise

XYZ Corp.Comparative Performance Analysis

Competition mapping

43April 10, 2023

Printing business

Software

Services

Servers

Storage

Sun

Dell

EMC

NetApp

Xerox

Accenture

EDS

Microsoft

Oracle

SAP

Size of the segment will show

percentage share of that BU and the

competitors within the BU will move

towards the center with increasing market share

XYZ Corp.Competitive Market Position

44April 10, 2023

Growth Vs Mkt Share

Fujitsu, 91.3

IBM, 59.5

NEC, 123.2

Hitachi, 78.1

HP, 85.3

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0% 5% 10% 15% 20% 25%

Mkt Share %

Y/Y

Gro

wth

Average Market Growth = 3.0%

Market Size = $ 710.3 M

Axis – Market share

Y Axis – Y/Y Growth

Size of bubble Revenue

Source :

$1 B

X Axis – Market share

Y Axis – Y/Y Growth

Size of bubble – Company Revenue


XYZ Corp. Vs Revenue and Profitability Comparison

45April 10, 2023

Revenue

$4,408

$3,925$4,079$4,169 $4,103

$3,837 $3,900$3,757

$3,892

12.1%7.6%

11.8%14.6%

10.6%5.9%

-2.3%-1.5%

10.7%

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Q205 Q305 Q405 Q106 Q206

-10.0%

0.0%

10.0%

20.0%

30.0%

Accenture Revenue $M HPS Revenue $MAccenture y-y Revenue growth % HPS y-y growth %

Operating Profit

15.7%

13.0%

16.5%

12.3%

3.3%

6.7%

8.3%7.8%

8.9%

1.6%0.4%

-1.8%-2.2%

2.1%

-9.0%

0.0%

0.9% 0.8%

0.0%

5.0%

10.0%

15.0%

20.0%

Q205 Q305 Q405 Q106 Q206

-10.0%

-5.0%

0.0%

5.0%

10.0%

Accenture Operating P rofit % HP S Operating P rofit

HP S OP y-y growth % Accenture OP y-y growth %

This Slide compares the Revenue , Operating Profit and Y/Y Growth for

and its Competitor

XYZ Corp. Vs Portfolio Comparison

46April 10, 2023

62%

29%21%

20%

50%50%

18% 21%29%

HPS Market IBM GS

C&I

MS

TS

Source: TBRI, IBM, S, IDC Q106,WW Services forecast update

Note: For comparison all data is for calendar year 2005. IBM GS CQ306 is for period ending Sep ’05. S CQ306 is fiscal year Q406.

GBS

GTS

Market mix is total services market per IDC Services Forecaster, Dec 14, 2006 release (includes both addressable and non-addressable for comparison purposes). IGS Market mix is as per company financials.

XYZ Corp. Vs KPI Comparison

Margins are comparatively better for IBM; Possible reasons – High margin product mix with software and services in the portfolioRelatively lower Revenue per employee – higher proportion of services business and direct sales forceHigher spend on R&D – scope for creating improved product/service mixHigher SG&A spend – better positioning and demand generation

47April 10, 2023

Note: All figures are for 2006 Fiscal Year; ’s Fiscal Year ends in October and that IBM’s in December

IBM

Y/Y Revenue Growth 0.3% 6.0%

Y/Y Net Income Growth 19.6% 158.5%

Gross Margin 41.9% 24.3%

SG&A as Percent of Sales 22.2% 12.3%

R&D as Percent of Sales 6.7% 3.9%

Revenue per Employee ($) $256,978 $587,551

Source : IBM 2006 Annual Report; 2006 Annual Report

Restricted

48

April 10, 2023

XYZ Corp. Vs Geographic Comparison

The Slide Compares the Revenue Generated by

Geographies for and its Competitor

52%

35%

38%

45%

10%20%

0%

20%

40%

60%

80%

100%

IBM HP

APJ

EMEA

Americas

• Americas region achieved revenues of $7,741 million in fiscal 2006, compared with $6,730 million for fiscal 2005, an increase of 15% in U.S. dollars and 14% in local currency terms. Growth was primarily due to the business in the United States, Canada and Brazil.

• EMEA region recorded revenues of $7,644 million for fiscal 2006 compared with $7,735 million for fiscal 2005, a decrease of 1% in U.S. dollars and an increase of 3% in local currency terms.

• The decrease was primarily due to a decline in business in the United Kingdom, including the impact of a $339 million reduction in consulting revenues associated with the resolution of the NHS contract.

49

April 10, 2023

XYZ Corp. Vs Comparison by Verticals

Source : EMC Earnings release Q406

28%

10%

16%

24%

12%21%

9% 10%

10% 10%

18% 19%

5% 4%2% 3%

0%

20%

40%

60%

80%

100%

IBM HP

Other

OEM

SMB

Communications

Distribution

Industrial

Public

Financial Services

50

April 10, 2023

XYZ Corp. Vs Customer Segments

Comparison of the Revenue Generated by the Customer

Segments for & the competitor and highlight

drivers for the growth as well as reasons for decline

10%

35%

38%

45%

52%

20%

0%

20%

40%

60%

80%

100%

IBM HP

Enterprise

SMB

Entry

51April 10, 2023

Cockpit ViewChange in Segments Over time

Entry

SMB

Enterprise

Comparison of the Revenue or Market Share Change for and

the competitor

XYZ

XYZ

XYZ

• IBM is challenging in this segments

Placeholder for key highlights or insights from analysis

Performance ChartingMarket Share Comparison for Segments

52April 10, 2023

x86

Blade Servers

SAN

DAS

NAS

Tape Storage

XYZ

0% 50% 100%

0% 50% 100%

0% 50% 100%

0% 50% 100%

0% 50% 100%

0% 50% 100%

Comparison of the Market Share Change for and the competitor across various

segments

Key takeaways

Analysts’ Opinion

“Software will contribute at least 22 percent of total revenue in 2008 from about 20 percent in 2006… Going forward, we believe these software acquisitions will help support top line growth, margin expansion, and free cash flow, unlocking hidden shareholder value”

- Benjamin A. Reitzes, UBS Investment Research

“On Lotus Connections: These social software applications have a high "value-to-effort" ratio, as is evidenced by the popularity (and value) of consumer space equivalents. Through 2008, these capabilities will give IBM a significant competitive edge over mainstream competitors that still lack them.”

- Gartner News Analysis

“Having a strong services business helps IBM sell everything from servers and storage to new software. Software and services are very complementary. They've made some key acquisitions in the last year, and they're not overspending on them. They're buying companies with established businesses that aren't too big, but that can grow”

- Doug Christopher, Crowell, Weedon & Co.,

XYZ Corp. Expectations

Growth

IBM expects its Software business to continue to be the strong growth driver

IBM is expanding its existing software offerings, especially those aimed at business users such as Lotus Connections, Lotus Quickr, Sametime, and WebS ere Portal Express

IBM expects to gain in server market targeting entry and midrange customer segment with benefits such as consolidation through virtualization

IBM BladeCenter JS21 Web serving farm server, and System p5 560Q midrange Linux server are examples of product introductions for the target segment

New Focus Areas

IBM continues to invest in high value-added business solutions like enhancing their global development center capabilities in India & China to leverage the Webify acquisition & to accelerate SOA

The first Power6 systems, lower-end models, are due in mid 2007. Power6 is expected to run at 4-5 GHZ with similar power consumption as Power5; an improved memory controller; improved SMT capabilities; a new floating-point engine, etc

TBR believes that IBM will continue to focus on BRIC as an area of growth for its main businesses of software, services and hardware, including its System z mainframe

Innovation

IBM, with the help of AMD, Sony and Toshiba, developed a new material to build a critical part for 45nm transistors. IBM expects this new material will lead to smaller, faster and more efficient chip circuitry than before

IBM plans to double the performance of its microprocessors in 2008 by using smaller, more efficient memory

IBM plans to use DRAM instead of SRAM as the embedded memory cache built onto each chip, according to a paper presented at the ISSCC (International Solid State Circuits Conference) trade show in San Francisco

XYZ Corp. Future Outlook


Backup Slides

XYZ Corp. Strategy Elaborating Core Competitor Strategies


Core Strategy Implementation Desired Outcome

Fully Integrated Technology Leadership

System p server lineBlueGene/L

World’s fastest computer at a low costStrong hold in high-end serverImage of technological leadership

Rapid, Successful Innovation @ Lower Investment

Power.orgOpenpowerCompanies/SuppliersUniversitiesGovernment

Higher acceptability to broaden scope

Broader scope to reduce cost production

Concentration on design to reduce intensity of competition by achieving the required edge for its servers

Enhancement of Brand image as a technical leader and as one stop solution provider

Computers (IBM's own)Game Consoles (Sony, Msft, Nint)Digital TVs

Engineering & Technology Services (E&TS) to sell services to Power community

Focus areas (what the co explicitly talks about and what analysts feel)

This section will include core objectives of the company which are not short term; this can be obtained from analyst briefings, management discussion & analysis etc.

Covers the companies’ moves in order to put the strategy in action

Try to incorporate quantifiable data to validate these inputs

Validate company strategy with solid examples of how the company has moved to achieve these goals

Covers what the company plans to achieve

Quantify wherever possible

XYZ Corp. Acquisitions & Divestitures

Acquisition Objective

Through acquisitions, IBM aims to blend software, hardware, and research into higher-margin, standardized services for value added integrated customer solutions

Date Company Synergies Foreseen

January 2007Softek Storage Solutions Corp.

Expansion of the Storage & Data services business unit part of IBM Global Technology Services

December 2006

Consul Risk Management Inc

To strengthen its service-management stack by adding compliance monitoring, auditing, and reporting capabilities for both mainframe and distributed environments

November 2006

Palisades technology partners To add the company’s business consulting and software automation services to IBM GTS

VallentVallent, with more than 200 customers and OEM agreements with Alcatel, Motorola and Lucent, improves IBM’s presence in the Telco vertical

September 2006 Global Value Solutions SA Add sProvides systems integration & other IT services to SMB clients

August 2006Webify; MRO; FileNet; and ISS

Improves IBM portfolio in SOA-based fabrics for Healthcare & Insurance; adds to Tivoli capabilities; expands content management software and security offerings

Recent Acquisitions

Since 2002, IBM has invested close to $16 billion to acquire over 60 companies – primarily in software and services. The acquired technologies and capabilities have been integrated into IBM´s offerings and solutions. In addition, IBM has divested several businesses including hard disk drives, displays, and most recently the PC business. The net effect of these acquisitions and divestitures is an improved profit profile for IBM

Competitor Profile Template

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