*** DRAFT - UNDER EMBARGO UNTIL JUNE 16, 2009 at 12:01AM ET

Published here after NY Times broke the embargo

IBM Readies Cloud for Business

New Choices to Automate and Simplify IT for Inefficient Business Tasks

ARMONK, NY – JUNE 16, 2009 – IBM today introduced the industry’s first set of “cloud” services and integrated products for the enterprise. This will give clients a reliable way to standardize IT functions that are rapidly becoming too costly or difficult to use.

Based on nearly two years of research and hundreds of client engagements, the IBM Smart Business cloud portfolio is meant to help clients take complex business processes and turn them into simple services. To accomplish this, Smart Business brings sophisticated automation technology and self-service to specific digital tasks as diverse as software development and testing; desktop and device management; and collaboration.

From utility grids to roadways, water systems and financial instruments, the world’s physical infrastructure is rapidly becoming more instrumented and IT-enabled, and corporate data centers will have to deal with a new flood of transactions and data coming from a billion connected people and a trillion connected devices. These offerings are aimed at helping clients deal with entirely new kinds of tasks and the colossal data burdens facing the data center.

The IBM Smart Business portfolio includes three “on-ramps”, or ways to quickly deploy the cloud model:

· IBM Smart Business standardized services on the IBM Cloud;

· Smart Business private cloud services behind the firewall built by IBM (run by IBM or the client);

· and “CloudBurst” workload optimized systems, for clients who want to build to their own cloud with pre-integrated hardware and software.

All three offerings include IBM’s service management system – a kind of air traffic control system for IT – that automates self-service, provisioning, monitoring as well as managing access and security for the cloud. This reflects IBM’s leadership and more than $10 billion in investments over the last five years in control and automation technologies, which become critical as the digital and physical infrastructure converge, including a trillion connected devices by 2011, according to IDC.

The “cloud” consumption and delivery model standardizes IT and business services by type of work or function. The first IBM Smart Business portfolio offerings are optimized for two areas: development and test and virtualized desktops.

IBM Smart Business: Software Development & Test

In many organizations software developers are fast becoming the nucleus of innovation, as IT becomes critical to all business processes. They build the services and capabilities that will drive future revenue and generate opportunity. In fact, developers are driving so much business value that the average enterprise devotes 30 to 50 percent of its entire technology infrastructure to development and test, but typically up to 90 percent of it remains idle.

In addition to high cost of inefficiently delivering this function and low utilization rates, today software developers lose a massive amount of time and productivity getting permissions and access to the systems and tools they need to do their jobs. Safely enabling developers to serve themselves can help reduce IT labor costs by 50 percent, reduce provision cycle times from weeks to minutes and improve quality, eliminating software defects by up to 30 percent.

IBM will offer clients three choices to deploy development and test services:

§ IBM Smart Business Test Cloud – A private cloud behind the client’s firewall, built by IBM

§ Smart Business Development & Test on the IBM Cloud (preview) – IBM Smart Business Application Development & Test featuring Rational “Software Delivery Services” over IBM’s secure, scalable cloud

§ IBM CloudBurst: a family of pre-integrated set of hardware, storage, virtualization and networking, with a sophisticated service management system built-in

In its ongoing quest to be competitive, South African financial institution Nedbank has been automating business processes through cloud technology.

“The time and labour required to deploy business process automation environments is a pain point. IBM cloud technology has proved to us that we can shorten the provisioning time significantly, reduce our cost and also increase the agility with which we can respond to business demands,” said Nicholas Parry, Nedbank. “The flexibility provided by IBM cloud technology has the proven potential to change the way we deliver service to our business, and as we look across our IT environment we see many more opportunities where the Cloud environment can add more value to our environment.”

“As a Fortune 500 company, Sinochem has always had an innovative IT culture to support our business, in sync with China’s national agenda of integrating industry and information technology. Cloud computing increases our flexibility in providing IT resources to meet the growing demands of our global business,” said Mr. Peng Jin Song, General Manager, Information Technology, Sinochem. “With IBM CloudBurst and the technical expertise from IBM Cloud Labs in China, we will be able to pool and maximize our resources to run our global business on the most efficient infrastructure possible.”

IBM Smart Business: Virtual Desktops

IBM’s clients have also seen success with leveraging cloud computing to virtualize desktops. Using up to 73 percent less power than traditional desktops and laptops, servers can more efficiently manage this work and deliver a better end-user experience. Based on IBM internal data from client engagements, virtualized desktops can also lower end-user IT support costs by up to 40 percent over a traditional environment.

IBM will offer two deployment options to help clients virtualize desktops:

§ IBM Smart Business Desktop Cloud – Cloud services delivered via the client’s own infrastructure and data center

§ IBM Smart Business Desktop on the IBM Cloud (preview) – IBM Smart Business Virtual Desktop is delivered via IBM’s secure, scalable public cloud

IBM and its clients have already seen success with this model. Pike County Schools System in Eastern Kentucky has 10,000 students in 27 schools, and 3,000 employees. Like many organizations today, their budget is decreasing while the need for increased access to technology is rising. The school’s 10 or 12 -year-old computers now behave as if they were top-of-the line 2009 models because the desktop is only an access point to the private cloud.

“Providing cost-effective technology solutions is an ongoing challenge for today’s K-12 schools,” said Maritta Horne, Chief Information Officer of Pike County School District in Eastern Kentucky. “With IBM Smart Business Virtual Desktop, more than 10,000 students in Pike County are able to easily and quickly access new courseware through private cloud desktops, and the school system is saving on expenses related to hardware updates, technology support staff and power usage.”

As a result, Pike County has achieved a reduction of over 62 percent of end-user support costs while providing equal access to education content across 27 schools and just over 2,000 desktops. The introduction of new courseware – what used to take over a year - can now be implemented instantly across all schools.

IT Gets “Smarter” with Built-in Service Management System

Service management is the operating system of the 21rst century, orchestrating thousands of processes and services from physical and digital sources across the world. What the operating system was for the PC era, the service management system will be for IT and business services in the cloud.

Consider that everyday 15 petabytes of new information is generated – more than eight times the information stored in all the libraries in the United States combined Pulled from Smarter Retail presentation – need proper source — and that by 2011 there will be one trillion Internet connected devices.[1] While consumers are generating 70 percent of this digital universe, enterprises will be responsible for maintaining 85 percent of it – including security, privacy, reliability and compliance.[2] Service management is what will orchestrate it all.

It is no coincidence that IBM has focused so much of its investment – through acquisitions and in research and development – on developing smarter control and automation technologies. In fact, about half of that investment is on software used to control and automate what you think of as traditional IT, and the other half on getting visibility and control of the trillion connected physical devices — mobile phone networks, smart utility meters, rail cars – that will be connected to data centers.

For information on how IBM is helping to usher in a smarter planet, please visit ibm.com/think

For more information on IBM’s cloud computing portfolio, research and labs please visit, ibm.com/cloud

[1] IDC paper, “The Diverse and Exploding Digital Universe”

[1] IDC paper, “The Diverse and Exploding Digital Universe”

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