© Copyright IBM Corporation 2010 IBM Smarter Planet Strategy Florence D. Hudson Energy & Environment Executive Cloud Computing Strategist IBM Corporate

© Copyright IBM Corporation 2010

IBM Smarter Planet Strategy

Florence D. HudsonEnergy & Environment ExecutiveCloud Computing StrategistIBM Corporate Strategy

A Smarter Planet

Building a Smarter Planet

2© 2010 IBM Corporation

Agenda

Personal Career Path

IBM Smarter Planet Solutions

IBM Energy and Environment Initiatives for a Smarter Planet



Florence DiStefano Hudson – Personal Career Path

Education:

- Elementary and Secondary school on Long Island, New York

- Princeton University, BSE in Mechanical and Aerospace Engineering

- Executive education at Harvard Business School and Columbia University School of Business

Summer Internships at Grumman and NASA Jet Propulsion Lab

Hewlett Packard in California 1980-1981

IBM since 1981 – living in New York State with global travel to 20 countries

- Sales, marketing, development, channels, strategy, human resources

- Executive since 1999 in strategy and marketing

- Energy and Environment Executive 2008-2010, and Cloud Computing Strategist 2010

- SWE Executive on Loan 2005-2006, SWE Board of Directors 2006, SWE Board of Trustees 2010



How much energy we waste: 6% to 10% lost because grids are not smartHow gridlocked transportation in cities is: $78B annual loss in U.S. in wasted gas and time

How antiquated our healthcare is: no linkage from diagnosis to providers to insurers to employers

How our water supply is drying up: 6 fold increase in demand at twice rate of population growth

Crisis in financial markets: inability to track risk has undermined confidence

“The digital and physical

infrastructures of the world are

converging. We must make the

mundane processes of business,

government and life sustainable.”

Inefficiency of our supply chains: $40B annual loss in CPG & Retail industries, 3.5% of sales

A Smarter Planet: The Next Leadership Agenda

Source: Sam Palmisano remarks to the Council on Foreign Relations, New York City, November 6, 2008

Prime areas to consider for improvement



Many of IBM’s smarter planet initiatives are interconnected – www.ibm.com/smarterplanet

Healthcare

Public Safety BuildingsProducts Cities

Water

Work

Retail Intelligence TelecomRailTraffic

Energy

InfrastructureFood

GovernmentBankingOil

TrafficHow we get from point A today to point B tomorrow

BuildingsGiven their environmental impact, it's time we designed from the earth up

OilGet to the "first" oil faster. Increase recovery rates. Sense and solve problems before they start.

WaterWhether too much or not enough, the world needs a smarter way to think about water

CitiesSafe neighborhoods. Quality schools. Affordable housing. Traffic that flows. It's all possible.

IntelligenceSmart thinking about data analysis



The Bad News: IT accounts for 2% of global CO2 emissions

The Good News: IT can significantly contribute to control and reduce the 98% of CO2 emissions

caused by other activities and industries

Sources: Gartner, Green IT, October 12, 2007; “The Green Road Less Traveled” by Thomas L. Friedman, The New York Times, July 15, 2007, http://select.nytimes.com/2007/07/15/opinion/15friedman.html?scp=2&sq=thomas%20l%20friedman%20july%202007%20greener%20smarter&st=cse

“… you can’t make a product greener, whether it’s a car, a refrigerator or a traffic system, without making it smarter — smarter materials, smarter software or smarter design.” - Thomas L. Friedman

Energy & Environment Focus



Tackling climate change is good for the climate and economy

Information and Communications Technology (ICT) can significantly improve energy efficiency and reduce GHG

emissions, driving potentially $1 Trillion in energy savings per year by 2020 and 7.8 Gigatons CO2e abatement

Smart Logistics: $442B/year

Smart Industrial

Automation: $107B/year

Smart Buildings: $341B/year

Smart Grids: $125B/year

Source: The Climate Group, “Smart 2020: Enabling the Low Carbon Economy in the Information Age.” 2008



Measuring, Monitoring, Modeling and Managing

MeteringMeteringSensingSensing

Real Time Data Integration

Real Time Data Integration

Real Time + Historical Data

Real Time + Historical Data

Data Modeling + Analytics

Data Modeling + Analytics

Visualization + DecisionsVisualization + Decisions

Data modeling and analytics to create insights to optimize smarter decisions

Feed

back

to u

ser a

nd d

ata

sour

ce;

Ince

ntive

s an

d ac

tions

to c

hang

e be

havio

r

Feedback to user and data source;Incentives and actions to change behavior

Comparison of historical data, with newly collected data

Data collection

Data Integration

Source: IBM Corporate Strategy

What does it mean to become Smarter?

Our world is becoming INSTRUMENTED

Our world is becoming INTERCONNECTED

Virtually all things are becoming INTELLIGENT



Reduce traffic congestion Reduce CO2 emissions Increase mass transit usage Improve environment Stockholm case study: Reduced traffic

congestion 25%, Carbon emissions 15%

Smarter Transportation Systems

Sustainable Business Solutions & Services Strategy Corporate Social Responsibility Green Sigma TM Green SNOW - Supply Chain Network

Optimization Workbench Smarter Cities Smarter Buildings Cap and Trade Systems

Smart Grid Reduce energy usage Improve grid management, reduce outages U.S. case study: 10% energy use reduction,

up to 50% reduced load on electric grid

IT and data center facilities energy efficiency Monitoring & verification of efficiency goals Energy Efficient, Virtualized, Dynamic IT/DC Cloud computing IBM and client case studies: 40% to 80% energy

use reduction, up to 85% less floor space

Smarter IT Infrastructure

IBM innovations address energy & environment challenges

Reduce traffic and pollution Retain and attract talent Cut facility costs/impact

Mobility Services

Smarter Water Management Flood avoidance Reduce water usage IBM case study: 27% reduced water usage, with 30% increase

in manufacturing output, saving $M in energy and water cost

Alternative Energy Research IT to ET: Applying IT cooling technologies to concentrator PV IBM know-how in thin films, advanced photovoltaic materials Nanomembranes for desalination Energy storage, modeling and analytics for optimization in

energy efficiency and renewable energy, etc.

Green IT and Data Centers


© 2010 IBM Corporation

• Energy Efficient Technologies and Services

• Intelligent Transportation Systems

• Intelligent Utility Networks

• Advanced Water Management

• Sustainable Solutions & Services

– Green Supply Chain – Green SNOW– Green Sigma TM

– Smarter Buildings– Cap and Trade Systems– Smarter Cities

• Alternative Energy Research

Energy, Environment and Sustainability Initiatives helpBuild a Smarter Planet – Delivering Innovations that

matter to business, government, people and the planet



Energy efficient solutions:Green IT and Green DatacentersServers and storage continually more energy efficientNew and retrofit equipmentRear Door Heat ExchangerMeasurement & Management TechnologyMonitoring & verification of efficiency goals through Energy Efficiency CertificatesVirtualization, consolidation

Benefits and studies: 40% to 80% energy use reductionUp to 85% less floor space

Energy Efficient Technologies and Services

© 2010 IBM Corporation 12

IBM Cloud Computing

“Cloud” is a new consumption and delivery model inspired by consumer Internet services.

Cloud enables:

Self-service Sourcing options Economies-of-scale Ecosystems creating economic value

Cloud represents: The industrialization of delivery for IT supported services

Multiple types of clouds will co-exist: Private, Public and Hybrid Workload and / or Programming Model Specific

Cloud Computing


IBM Cloud Computing

Analytics Collaboration Development and Test

Desktop Storage Business Services

Fit for purpose middleware platform

Common Compute Platform(Compute/ Network/ Storage)

Base Enterprise Platform

Blue Insight: Smart Business Analytics Cloud

109,000 IBM users growing

to 200,000

LotusLiveHandling 75% of all IBM web conferencing

CIO Dev/Test Cloud

• Build time for dev/ test

environment from 1wk to 1hr • Clients reduce labor costs 30-

50%

Workplace Cloud

• Estimated savings up to

30% • 1200 China Dev Lab users plus

Call Centers

Network Storage Cloud

• Up to 40% savings in storage

costs

Production Cloud•1,000 applications

identified

IBM uses cloud computing to meet internal and external challenges and opportunities, saving millions of dollars


IBM Cloud Computing

Compute and Storage CloudsEnterprise-class Infrastructure Services

Compute and Storage CloudsEnterprise-class Infrastructure Services

Additional Industry Cloud

Platforms

Additional Industry Cloud

Platforms

Industry Services

Industry Services

Retail Industry Cloud Platform

Retail Industry Cloud Platform

e-Commerce Services

Demand Replenishment

Services

Healthcare Industry Cloud Platform

Healthcare Industry Cloud Platform

Public Health

Services

Clinical Development

Services

Collaborative Health Care

Services

Medical Image Archive Service

Industry Vertical

Business Services

Workload Optimized

Industry Cloud

Platforms

On a platform of

robust Infrastructur

e Services

Cloud enables global industry transformations – Creating new centers of economic activity fueled by an information supply chain



Intelligent Transportation Systems Integrated transportation solutions:

Road user chargingCongestion pricingIntegrated fare management

Benefits:Reduce traffic congestionReduce CO2 emissionsIncrease mass transit usageImprove environment

Stockholm case study with clear results: Reduced traffic congestion 25%Reduced carbon emissions 15-40%$120M/yr in revenue to City, 4 yr paybackCongestion charges fund transit improvements



Intelligent Utility Networks

Smart Grid Solutions:Smart grid management

Smart metersSmart appliancesSmart integration

Real-time energy marketDynamic response to constraints on the grid

Benefits in PNNL case studyReduced peak load demand on the energy grid 15% to 50% Reduced consumer energy bills by 10%

150 & 350 KWPower Generator

Application Server

600 HP Water Pump

Thermostat

Space Heater

Water Heater

Meter

LCM

GFA

LCM

Dryer

Energy Market

Port Angeles Water Supply

PNL

Pacific Northwest National Lab (PNNL) Shadow Market

Load Sheddi

ng

Heat Storage

PNL Application Web Server

Internet

Additional DR

Control/ Application

Server

Residential Home

Invensys Home Gateway

125 Residential Homes

Invensys Application/ Web Server IBM: Event Bus & Event-

based Programming Model



Smarter Water Management Strategic Water Information Management Solutions –

SWIM Sensing and Monitoring Data Integration, Workflow, Management Deep Thunder – Advanced Micro-weather prediction Storm Impact and Response Prediction

IBM Advanced Water Management Centers of Excellence Amsterdam, Netherlands Dublin, Ireland

Benefits Flood forecasting, predictive modeling Environmental analysis & prediction Reduced water usage and costs IBM case study: 27% reduced water usage, 30% increase in manufacturing output, saving $M in energy and water

REON- River & Estuary Observatory Network

18



Green Sigma™ grew from IBM’s deep internal experience in facilities and manufacturing process improvement

Green Sigma™ is aimed at reducing energy & water, waste generation and CO2 emissions throughout a company’s operations, resulting in:

–Lower environmental impact– Increased efficiency–Reduced costs

The key components are:

Metering and Monitoring

Management through the Green Sigma™ Dashboard

Applied Statistical Techniques3

2

1

““If you can measure it, you can manage it”If you can measure it, you can manage it”

19



The Green Sigma™ Dashboard for Energy proactively monitors KPI data, alerts and trends, and enables drill-down analysis…

20



Similarly, the Green Sigma™ Dashboard for Water monitors KPI data, alerts and trends to drive Water related benefits


Sustainability on a Smarter Planet: Smarter Buildings

21

What are smarter buildings?Smarter Buildings are well managed integrated physical and digital infrastructures that provide optimal occupancy services in a reliable, cost effective, and sustainable manner.

Smarter Buildings…

Are more cost effective by reducing energy and operating costs.

Use active and designed-in techniques to achieve efficiency and environmental responsibility.

Have the ability to interact with occupants inside them as well as the environment around them.

Maintain a safer and more secure workplace.

Communicate in real-time to supporting infrastructure ( i.e. smart grid, broadband, etc.).



22

FireFunctionality

checks,Detector service

WaterSmart Meters,

Use / Flow Sensing

HVACFans, Variable Air

Volume, Air Quality

ElevatorsMaintenance, Performance

Access/SecurityBadge in,

Cameras, IntegrationPerimeter, Doors, Floors, Occupancy

LightingOccupancy

Sensing

24/7 MonitoringCondition Monitoring, Parking Lot Utilization

EnergySmart Meters,

Demand response

How does a building become smart?

Voice/Video/Data

Community Services

Transportation, Traffic, Events

Community Services

Transportation, Traffic, Events

UtilitiesDemand Mgmt,

Cost Control

UtilitiesDemand Mgmt,

Cost Control

WeatherCurrent

Predictions

WeatherCurrent

Predictions

Emergency Services

Alerts, Actions

Emergency Services

Alerts, Actions

Commercial Potential

Advertisement

Commercial Potential

Advertisement

Integrated Building & Communications Services

An

alytics and

O

ptim

ization

Ext

ern

al

Inte

gra

tio

n

PortfolioEstates MgmtPortfolio

Estates Mgmt

OccupancySpace Mgmt

OccupancySpace Mgmt

Waste MgmtTrash/Water/Recycle

Waste MgmtTrash/Water/Recycle

ComplianceEnvironmental reports

ComplianceEnvironmental reports

Tenant ServicesHelp Desk

Tenant ServicesHelp Desk

Asset MgmtLifecycle

Asset MgmtLifecycle

Building ServicesMaintenance

Building ServicesMaintenance

Industry Specific Hospital, hotel, etc.

Industry Specific Hospital, hotel, etc.

Energy UsePassive/ActiveEnergy UsePassive/Active



23

What does it mean to be a Smarter Building? The interconnection of physical assets and information technology can optimize efficiency, production and consumption in many types of buildings.

Smarter Commercial Building

Smarter CampusSmarter Data Center

Provides integrated facilities operations information for owners/operators in order to optimize energy usage and services based on tenant’s needs.

Integrated facilities and IT insight to energy efficiency of datacenter and the correlation of IT and facilities information.

Intelligent infrastructure platform and tools to manage plug-in electric vehicle stations, buildings, badging, central utility plant

Smarter Cell Tower

Integration of active and passive management enables optimized operations to reduce truck rolls.



24

What does it mean to be a Smarter Building? The interconnection of physical assets and information technology can optimize efficiency, production and consumption in many types of buildings.

Smarter Hotel Smarter Airport

Smarter Government BuildingSmarter Hospital

Integration of all the guest subsystems of hotel that welcome guest according to their preferences and adds to convenience during stay.

Sensor instrumentation used in real-time for asset location and automated workflows such as medical equipment maintenance.

Provides efficient passenger and cargo services, climate control, wi-fi access, track maintenance tasks and help achieve security and safety compliance

Utilize fully serviced office hubs and mobility tools to improve public services. Match occupancy levels with portfolio wide estates data to optimize building utilization.



25

Smarter Buildings applications and benefit examples.

SMART ISHolistic energy mgmt that enhances the efficiency of buildings and other assets.

St. Regis Hotel:Designed for 4.9% energy cost to revenue compared to average for 5 star hotels average at 8%. Reduced energy cost / revenue 40% vs. similar 5 Star hotels.

SMART ISIntegrated communications and building services that support intelligent operations.

Ave Maria University:Converged 23 systems to single IP network. Integrated JCI Metasys with IBM Maximo. Saved $1M in building costs and $350K/yr in combined operating costs.

SMART ISIntegration of energy and asset management to lower operating cost.

Saint Barnabas Medical Center:Improved asset utilization and staff response times by 90%. Reducing overhead paging by 94%. Enhancing HCAHPS scores by eliminating communication barriers between care teams and patients.



Electronic Peephole Better views of hallway Connect directly to the TV in the

guest room

Page 26 <Document Title> | <Date>

Self check in / check out Kiosk Equipped with Passport / ID reader Equipped with Hotel key card dispenser Saves time for client for check in/out

Integrating more than 20 sub-systems using IBM’s integration skills and latest technology.

“In the hotel industry, technology can make a real difference by significantly enhancing the customer experience and maximize their comfort and satisfaction," said Eric Du, General Manager,

Dragon Hotel. "Through the cooperation with IBM, Dragon Hotel would be able to build a Smart Hotel system to improve significantly the operational efficiency and productivity, the response

time to client demands, and most of all, the client experience."

China Hangzhou Dragon – Smart Hotel Reference

Source: http://www.reuters.com/article/idUS124088+14-Jul-2009+PRN20090714



Initial focus areas on expense / efficient operations

– Maximo: facilities and asset management integrated with energy management

– Integrated Communications Services, Green Data Center

– Property Performance Management Solution, Asset Management and Asset Analytics including portfolio analysis

– Aggregation and analysis of data across multiple buildings – performance management dashboards, building data visualization, real-time monitoring

– IBM's Green SigmaTM coalition – partnerships to integrate the physical and digital infrastructure

Smarter Building Entry Points and Value



Carbon Reporting and Trading – Cap and Trade

Systems Players and participantsGovernmentExchangesBrokersEnterprises and UtilitiesCarbon Credit Creators – CC&S

EvolutionEU Emission Trading SchemeAsian interestUS evolving – voluntary, regulated, regional, national?

Solutions today for Carbon reporting software Potential benefit: Reduced GHG emissions

GovernmentGovernment

Creates and Creates and regulates the regulates the

schemescheme

ExchangesExchangesRun the Run the Trading Trading platformplatform

EnterprisesEnterprisesManage and Manage and

Report Report Carbon Carbon

EmissionsEmissions



Smarter Cities Bring it All Together – with intensive use of information technologies for

sustainable developmnet

Intelligent Transportation Systems- Road Usage Charging/Congestion Pricing- Integrated Fare Management- Traffic Information Management

Energy Management- Smarter Building Management- Automated Meter Management- Smart Grid – Demand Management- Energy Network Monitoring & Stability- Proactive management of the alternative

energy mix

Environmental Management- City-wide Measurements- Key Performance Indicators (KPI’s)- Energy, Water, Waste, CO2 Management- Scorecards- Reporting

Water Management- Water purity monitoring- Water use optimization- Waste water treatment

optimization

Public Safety- Smarter Surveillance Systems- Emergency Management Integration- Micro-Weather Forecasting- Cyber-security

Telecommunications- Fixed and mobile

operators- Media Broadcasters



Energy Management in a Smarter Planet

The interconnection of physical assets and information technology can optimize energy production, efficiency and consumption

Smarter BuildingsIntegrated and optimized physical and digital infrastructures to create cost effective and operationally efficient buildings and micro grids – energy, water, waste, GHG management

Smarter BuildingsIntegrated and optimized physical and digital infrastructures to create cost effective and operationally efficient buildings and micro grids – energy, water, waste, GHG management

HomesEnergy and Water Management - Central control and connection of

home systems - electronics and community micro grids

HomesEnergy and Water Management - Central control and connection of

home systems - electronics and community micro grids

AppliancesAutomatically adjust power usage based on grid status

AppliancesAutomatically adjust power usage based on grid status

Vehicle ChargingSmart charging of hybrid & electric vehicles

at home and at commercial locations

Vehicle ChargingSmart charging of hybrid & electric vehicles

at home and at commercial locations

Distribution CompanyDistribution management

Energy supply chainNetwork operation

Distribution CompanyDistribution management

Energy supply chainNetwork operation

Electric CompanyCustomer account management

Time of use managementEnergy management

Electric CompanyCustomer account management

Time of use managementEnergy management

CentralPower Plant

MetersDigital link with power company to enable energy optimization

and time-of-use savings

MetersDigital link with power company to enable energy optimization

and time-of-use savings

Energy Exploration, Production and Generation – Coal, Oil, Gas Nuclear, Hydroelectric Solar, Wind, Geothermal

Energy Exploration, Production and Generation – Coal, Oil, Gas Nuclear, Hydroelectric Solar, Wind, Geothermal

Commercial and Government Buildings

Solar and Wind Farms

Industrial Plants



• Leverage know-how in thin films, semiconductors, silicon, materials science, cooling for photovoltaics including concentrator photovoltaics

• Energy Storage Research – Lithium/Air

• Nanomembranes for Reverse Osmosis filtration of salts and other toxins from water for desalination

• Modeling analytics for optimization in energy efficiency and renewable energy

• Cyber-security research and development

• IBM Center of Excellence for Nuclear Power in LaGaude, France

IBM Energy and Environment Research



Collaborating to develop solutions …

IBM has a long history of environmental tradition and leadership.

1971: T. J. Watson Jr. issued IBM’s first corporate policy on environmental protection

1976: Think!, the company magazine, devoted an entire issue to IBM’s energy conservation and environmental programs

1989: IBM offers its first product take-back program

1987 - 2006: Reduction in hazardous waste generation since the 1987 base year of this pollution prevention metric

95%

2007: Invested in Intelligent Utility Networks, Intelligent Transportation Systems, Project Big Green

2006: IBMers “Jam” on innovation for a better planet, and IBM invests in Big Green Innovations

2006: Amount of IT product and product waste processed by IBM’s product End-of-Life Management operations that was reused or recycled

96%

1990 - 2006: Between 1990 and 2006, IBM’s global energy conservation actions reduced or avoided CO2 emissions equal to 44% of its 1990 emissions

44%

1990: Think! Devoted an entire issue to IBM’s environmental programs – beginning IBM’s annual Corporate Environmental Reporting

1991: Established IBM’s Product Stewardship Program

1992: IBM becomes charter member of Energy Star Program

1994: Established Global Materials Recovery Center Network for product re-use and recycling

1997: IBM becomes the first major multi-national to earn a single global registration to the ISO 14001 environmental management system standard



33

IBM’s Commitment to Energy Efficiency – Actions and Results

IBM develops and deploys Green projects to save Millions of $ per year– Green IT– Green Datacenters– Smarter Buildings– Smarter Water Management– Smart Grid– Renewable Energy

Between 1990 and 2009, IBM saved over $370M through energy conservation actions– Saving 5.1 B kWh of electricity consumption– Avoiding nearly 3.4 million metric tons of CO2 emissions– Annual energy conservation/efficiency goal is 3.5%+ per year– First established IBM Corporate Policy on Energy Conservation in 1974

In 2009, IBM energy efficiency projects saved 5.4% energy use and $27M in energy costs



The Green Sigma™ Coalition

Working together to co-create a Smarter Planet, Smarter Cites, Smarter Buildings - Accelerating the move toward sustainable enterprises - Collaborating on showcase projects to drive quick ROI & continuous improvement- Enabling public & private enterprises to reduce energy, water, waste and GHG

Emissions… across the value chain. Saving money, time and resources.



Florence D. [email protected]

Documents

© Copyright IBM Corporation 2010 IBM Smarter Planet Strategy Florence D. Hudson Energy & Environment Executive Cloud Computing Strategist IBM Corporate