Deepak Advani General Manager

May 2015

2 © 2015 IBM

Forward-Looking Statement Certain(comments(made(during(this(event(and(in(the(presenta3on(materials(may(be(characterized(as(forward(looking(under(the(Private(Securi3es(Li3ga3on(Reform(Act(of(1995.(ForwardElooking(statements(are(based(on(the(company’s(current(assump3ons(regarding(future(business(and(financial(performance.(These(statements(by(their(nature(address(maIers(that(are(uncertain(to(different(degrees.(Any(forwardElooking(statement(made(during(this(event(or(in(these(presenta3on(materials(speaks(only(as(of(the(date(on(which(it(is(made.(The(company(assumes(no(obliga3on(to(update(or(revise(any(forwardElooking(statements.(((

Those(statements(involve(a(number(of(factors(that(could(cause(actual(results(to(differ(materially,(including(the(following:(a(downturn(in(economic(environment(and(client(spending(budgets;(the(company’s(failure(to(meet(growth(and(produc3vity(objec3ves,(a(failure(of(the(company’s(innova3on(ini3a3ves;(risks(from(inves3ng(in(growth(opportuni3es;(a(failure(of(the(company’s(intellectual(property(porOolio(to(prevent(compe33ve(offerings(and(the(failure(of(the(company(to(obtain(necessary(licenses;(cybersecurity(and(privacy(considera3ons;(fluctua3ons(in(financial(results,(impact(of(local(legal,(economic,(poli3cal(and(health(condi3ons;(adverse(effects(from(environmental(maIers,(tax(maIers(and(the(company’s(pension(plans;(ineffec3ve(internal(controls;(the(company’s(use(of(accoun3ng(es3mates;(the(company’s(ability(to(aIract(and(retain(skilled(personnel(and(its(reliance(on(cri3cal(skills;(impacts(of(rela3onships(with(cri3cal(suppliers(and(business(with(government(clients;(currency(fluctua3ons(and(customer(financing(risks;(impact(of(changes(in(market(liquidity(condi3ons(and(customer(credit(risk(on(receivables;(reliance(on(third(party(distribu3on(channels;(the(company’s(ability(to(successfully(manage(acquisi3ons,(alliances(and(disposi3ons;(risks(from(legal(proceedings;(risk(factors(related(to(IBM(securi3es;(and(other(risks,(uncertain3es(and(factors(discussed(in(the(company’s(Form(10EQs,(Form(10EK(and(in(the(company’s(other(filings(with(the(U.S.(Securi3es(and(Exchange(Commission((SEC)(or(in(materials(incorporated(therein(by(reference.(Addi3onal(informa3on(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(Rela3ons.((

Source: Links in appendix

By 2018, organizations who offer personalization will outsell companies who don’t by more than 30%

During the next 3 years, 60% of digital commerce analytics investments will be spent on analyzing customer journeys

72% of CEOs are making major changes to understand their customers’ individual needs

“Customer-to-Business” - It’s all about personalization at scale

of companies say they have or are close to having a holistic view of their customers

of customers stated that the average brand doesn't understand them as individuals

The great customer experience divide

Source: EConsuntancy and IBM Study, April 2015; Link to study in appendix

IBM Commerce is enabling 8,000 global brands in 50 countries to prepare and compete in this new era of commerce

Source: 1 Nucleus Research 2014 2 List based on Stores.org, data from NRF 3 Global Fortune 100 list for 2012 (CNN Money) 4 IBM Market Intelligence; Footnote in appendix

IBM Commerce is delivering value to clients:

!  Nearly 15X ROI for every dollar spent on IBM Commerce¹

!  5.5 Million transactions exchanged through B2B Cloud daily4

!  Companies report an average savings of 11% with IBM procurement solutions4

!  350,000+ global trading entities connected

World leading businesses run on IBM Commerce solutions:

9 of the Top 10 US Retailers²

9 of the Top 10 Automotive companies³

7 of the Top 10 Top Financial Services³

Winning in commerce takes an integrated approach across the entire value chain from supplier to client engagement

$100B+ market opportunity, growing double-digit driven primarily by the “Line of Business” buyers

Source: IBM Market Intelligence

For Marketing Leaders !  Digital Marketing !  Lead Management !  Customer Experience Analytics !  Journey Design !  Omni-channel Marketing !  Real-time Personalization

For eCommerce Leaders !  B2C Commerce !  B2B Commerce !  Omni-channel Merchandising

For Customer Experience Leaders !  Customer Analytics !  Journey Analytics !  Digital Analytics

For Procurement Leaders !  Procurement Transformation !  Enterprise Contract Management

For Transaction Service Leaders !  Payments Management For Supply Chain, and IT Leaders !  B2B Integration !  Managed File Transfer

IBM Solutions

Solutions tailored to the emerging needs of line of business buyers and differentiated through

ANALYTICS & DESIGN LEVERAGING ON $24B+ OF IBM'S

ANALYTICS INVESTMENTS

IBM delivers persona-based integrated solutions that are consumable and extensible

Watson Analytics Demo – “load the data”

Watson Analytics Demo – “analyze the data”

Watson Analytics Demo – “predict the future”

Email Chat

Call center notes

Web-click stream

In person dialogues

INTERACTION DATA Opinions & Social Data Preferences Needs &

Desires Survey Results

ATTITUDINAL DATA

Orders Transactions Payment history

Usage history

BEHAVIORAL DATA

Attributes Geo Demographics

Character info

Self-declared Info

DESCRIPTIVE DATA

A single view of the customer: all the data matters

SMS/ MMS Emails

Mobile

Online Advertising

Social Media

Search Call Centers

Website Client Centers

Kiosks Events

Direct Mail

In-store POS

Customer Service

Email Chat

Call center notes

Web-click stream

In person dialogues

INTERACTION DATA Opinions & Social Data Preferences Needs &

Desires Survey Results

ATTITUDINAL DATA

Orders Transactions Payment history

Usage history

BEHAVIORAL DATA

Attributes Geo Demographics

Character info

Self-declared Info

DESCRIPTIVE DATA

A single view of the customer: all the data matters

SMS/ MMS Emails

Mobile

Online Advertising

Social Media

Search Call Centers

Website Client Centers

Kiosks Events

Direct Mail

In-store POS

Customer Service

Collaborative innovation with an open ecosystem

Our growing ecosystem: 1700+

16

Digital'Agencies'&'Mktg'Svc'Providers''

Complementary'Solu;ons'&'ISVs''

Systems'Integrators''

Resellers'&'SaaS'Providers'

!  Deeper, more personalized insights shape every facet of customer interactions across virtually all channels

!  Improved efficiencies by 40% across the bank, with an expected 20%+ return on equity through new customer-centric banking

!  Expects to generate a bottom-line benefit of $200 million (USD) in the first 24 months of the project

Marks & Spencer !  Leverages its omni-channel programs to stay on top

!  Embraced emerging recreational shopping trend by continuously producing relevant content that delights customers

!  Launched new product lines online, generating ~$312.8 million (USD) in sales revenues

!  Dynamic inventory management emphasizes what is in stock in the moment & delivers real dialog with customers

© 2015 IBM 19

! Big market opportunity

! Portfolio differentiation

! Open Ecosystem

Footnotes 1. Chart 3: Customer to business – it’ all about personalization at scale By 2018, organizations who offer personalization will outsell companies who don’t by more than 30%: www.internetretailer.com/2014/01/21/personalized-web-content-will-be-crucial-b2b-sales 72% of CEOs are making major changes to understand their customers’ individual needs: http://www.farlandgroup.com/2012/10/cheif-marketing-officers-cmo-growth/ During the next 3 years, 60% of digital commerce analytics investments will be spent on analyzing customer journeys: https://www.manthan.com/analyst/2015-gartner-digital-commerce-vendor-guide/?utm_source=Website:%20Ecommerce

2. Chart 4: The great customer experience divide http://www-03.ibm.com/press/us/en/pressrelease/46454.wss

3. Chart 5: IBM Commerce is enabling 8,000 global brands in 50 countries to prepare and compete in this new era of commerce IBM Commerce is enabling 8,000 global brands in 50 countries to prepare and compete in this new era of commerce: http://www- 03.ibm.com/press/us/en/pressrelease/43513.wss Nearly 15X ROI for every dollar spent on IBM Commerce: http://nucleusresearch.com/research/single/ibm-smarter-commerce-delivers-14-79-for-every-dollar-spent/ 5.5 Million transactions exchanged through B2B Cloud daily: http://www-03.ibm.com/press/us/en/pressrelease/43347.wss