IBM e-business Hosting Services
The Cisco Powered Network and Dedicated Hosting Architectures
January 2002
Agenda
The Value of Outsourcing
Why IBM Global Services for Hosting?
Why Cisco?
Cisco Powered Network and the Cisco Dedicated Hosting Architecture
Summary
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
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
according to Morgan Stanley...
Performance and business benefits from hosting overshadow the large cost benefits ●Downtime drops by close to 90% and average cost savings can reach 80-90%
Source: "The Internet Hosting Report," J. Camp, A. Henry, Morgan Stanley Dean Witter, November 2000
Better Performance
Improvement/(Reduction) due to hosting
Total Server Downtime (88%)Total Employee Downtime (92%)
Downtime Incidents (87%)
Servers Affected (11%)Employees Affected (44%)
Sharp reduction in downtime, and the associated increases in productivity and potential reve-nue provide hosted companies with a clear business advantage.
Lower Costs
Improvement/(Reduction) due to hosting
In-House Cost/Server $35KHosted Cost/Server $7K
(80%)Rev from Reduced Downtime/Server $52K
Employee Productivity $7K
Savings achieved through hosting expertise and economies of scale allow companies to improve their IT return on investment.
Access to skills
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%
Value of hosting skills is also achieved by 24x7 service level agreements and gaining access to additional managed services expertise.
Companies gain 3 significant benefits from hosting
Hosting Advantages
IBM Global Services 2001 Earnings Performance
Source: IBM 2001 Earnings Presentation www.ibm.com/investor
• 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
Revenue $8.7B, +13% @CC
Services +15%Maintenance +3%
Signings $16BBacklog $95B
2Q Results
• 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
Revenue $8.7B, +9% @CC
3Q Results
Services +11%Maintenance +1%
Signings $10BBacklog $97B
Americas Europe Asia Pacific Total
IBM Global Services Capabilities
3Q 2001
61 Data Centers421 Processors189,053 MIPS1,267 Terabytes27,054 M/R Svrs
92 Data Centers175 Processors51,558 MIPS216 Terabytes10,728 M/R Svrs
613,748 570,500 274,869
201886
361,6111,915
56,935
1,459,117
21 Centers 10 Centers 8 Centers 39 Centers
23 Centers11,400,000 Calls
16 Centers5,932,000 Calls
24 Centers2,503,000 Calls
71 Centers19,835,000 Calls
Processing Capabilities
Managed Desktops
Customer Service Centers
e-business Hosting Centers
48 Data Centers290 Processors121,000 MIPS432 Terabytes19,153 M/R Svrs
➨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
➨500,000 non-IBM machines under management➨20,000 e-business engagements➨2,100 Hosting Clients➨Leader in Web Privacy and Security Services
GlobalAt A Glance
IBM’s Commitment to the Hosting Business
IBM Data Centers are Cisco Powered Networks.
Chicago ILLisle ILSchaumburg ILSt. Louis MODallas TX (2)Boulder COPhoenix AZSan Jose CA
Southbury CTNewark NJSecaucus NJWest Orange NJAshburn VASterling VARaleigh NCAtlanta GA
Mexico CityBuenos AiresSao Paulo
TorontoMontrealVancouverCalgary Portsmouth, UK
London Docklands, UKWarwick, UKParisEhningen, GermanyFrankfurtMilanRomeTurinMadridLebanon
TokyoMitaka
Singapore
$4 billion investment 35 e-business hosting centers
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
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 R&D investment, $5.6 billion in capital expenditures and $500 million in strategic acquisitions
CiscoLeader 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
e-business Hosting Environment
Double security layer and high availability options available.
Cisco Dedicated Hosting Architecture
Small Medium Large
SCA 11000 SCA 11000
CE 507 CE 560
IDS 4230 IDS 4230
2621 2651
HSE HSE
CTE 1400 CTE 1400
PIX 525 PIX 525
7200
Content Engine
Intrusion Detection
Back-End Router
SSL Termination
Monitoring
Multiple ISPs (BGP)
Wireless Support
Additional Firewalls
Additional L3 Functionality 2621 3620
SCA 11000
CE 560
IDS 4230
2651
HSE
CTE 1400
PIX 535
7200
3640
Basic bundles – rest are options
Cat 2980 GACat 2980 GA Cat 4006Cat 4006
CSS 11051CSS 11051 CSS 11151CSS 11151
PIX 525PIX 525 PIX 525PIX 525
Layer 2 Switch
Content Switch
Firewall
Cat 6509Cat 6509
CSS 11155CSS 11155
PIX 535PIX 535
Cisco DHA is a set of network equipment, dedicated for each enterprise customer, for deployment in a cage or rack in IBM’s data centers.
Each Bundle Also has a High Availability Scenario
Benefits of Cisco Dedicated Hosting Architectures
Ease of deployment
Single point of support
Ease of management
Best-of-breed products
Faster time-to-service
Better SLAs – flexible, scalable, and reliable
Comfort factor – all Cisco equipment
Facilities Hosting/Co-location Service
Managed Hosting/ e-business Hosting/ e-sourcing
If Enterprise Wants to
Outsource
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
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
IGS provides Cisco Network Bundle (DHA) to Enterprise customer
IGS or customer- owned equipment.
Summary
• Cisco is the worldwide leader in networking components for the Internet
• Managed Hosting Services is IBM’s 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
IBM and CiscoThe logical choice