Key note given at Danish Foreign Ministry's conference for the inauguration of 3 new Innovation Center Denmark, locations in Sao Paulo, New Delhi and Seoul,

1. Open Innovation in a
globalized world
@ IBM
Åbningskonference 17.06.2013
Anders Quitzau, Innovation Executive
about.me/andersquitzau
© 2013 IBM Corporation1

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“Innovate or die
- Collaborate and strive”
“Innovate or die
- Collaborate and strive”
Anders Quitzau

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1984 1992 2004 2005 2006

4. © 2013 IBM Corporation
§ Highlights since 2000 …
– Added $10B in growth market revenue
– Tripled SW profits
§ Exited commoditized businesses:
– PCs
– Hard disk drives
– Printing Systems
– Network
§ Created a partner world of more than 100K partners:
ISVs, VARs, resellers, developers, CSIs
§ Strengthened position in:
– Business Consulting
– Service-Oriented Architecture
– Analytics & cloud computing
– Virtualization
– Open, modular systems
§ Acquired 127 companies in last 12 years
– to complement and scale our portfolio of products and
offerings
§ 8th consecutive year of double-digit EPS growth
§ Revenue of $99.9B – up 4%
§ Record net income of $14.8B – up 10%
§ Growth markets accounted for 21% of IBM’s total
geographic revenue
§ More than 6.300 US-patents
– EPS nearly tripled to almost 15$ in 2011
– $109B in Free Cash Flow
– Returned $107B to shareholders
We sold our – a.o. - our, ERP PC, printing and network, businesses
Remixed our portfolio toward services,
software, and integrated solutions…
2011 another record year…
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5. © 2013 IBM Corporation
But we still sell ERP, PCs, printers, storage, network infrastructure
etc.
Alliances
Enterprise Applications
Alliances
IT Infrastructure
Alliances
Networking
Alliances
IT Infrastructure
Alliances
Smarter Cities Alliances
IT Infrastructure
Alliances
Infrastructure
Alliances
Market Development
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“Our path is innovation. We are an innovation
company which relentlessly changes and
keeps moving to high value.
Innovation shapes what we do, who we are as
a company, and our strategy.“
Ginni Rometty, IBM CEO

7. © 2013 IBM Corporation
Where does innovation come from?
IBM Institute for Business Value, CEO Study
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8. © 2013 IBM Corporation
We Embrace Collaborative & Open Innovation
§ Established an innovation agenda that
spans multiple dimensions:
– Product and technology
– Services
– Business process
– Business model
– Management and culture
– Policy and society
§ Enabled global collaboration
– Culture of collaboration
– Innovation ecosystem
Why? What we’ve done
§ Become our clients’ “innovation partner”
– Address client priorities
– Build deeper client relationships
§ Respond to changing nature of innovation
– Opening up and collaboration
§ Organizations need each other to be
successful
– Pace of innovation outstrips an organization s
ability to go it alone
§ Changing workforce dynamics
– Globalization
– Millennials”
Venture
Capitalists ISVs Business
Partners
Universities
§ Technical
§ Business
Community
Leaders
Competitors
Employees
Regulatory Bodies
Investors
IT Analysts
Alumni
Standards
Bodies
Policy-
makers
Clients
Innovation Ecosystem
“We opened up our labs, said to the world, ‘Here
are our crown jewels, have a look at them’. The
Jam -- and programs like it – are greatly
accelerating our ability to innovate in
meaningful ways for business and society.”
- Sam Palmisano, IBM CEO
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9. © 2013 IBM Corporation
IBM s innovation portfolio reflects the tremendous creativity and
contributions of many organizations – both within and outside
IBM
IBM-led
Innovation
External-led
Innovation
Involvement of
External Partners
l IBM Applied Research Projects
l Emerging Business Opportunities
l TAP / BizTech
l Seed-stage Startupsl First Of
A Kind
l IBM Industry
Solutions
l IBM Business
Partner Solutions
l IBM Research Services
l Ideas
l Product & Service Offerings
l Idealabs, Jams
“Bleeding
Edge”
Generally
Available
l University Programs
l Extreme Blue
l Startups / Entrepreneurs
l VC Backed Firms
(Late Stage)
Maturity of Tech-
nology/Solution
l Academy of Technology
l IBM Institute for Business Value – studies and PoVs
l IBM Basic Research Projects
l IBM / Client Joint Innovation
l Acquisitions
l AlphaWorks
l CIO-fund
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“The World is our
Laboratory…”
IBM Research

11. © 2013 IBM Corporation
A successful Research Division…..
§ Clearly defines its success goals
§ Leads through partnerships
§ Leverages its global presence
§ Couples with outside world
§ Partners with its customers
§ Is constructively self-critical
§ Focuses on productivity
§ Grows and develops their
researchers and staff
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12. © 2013 IBM Corporation12
IBM Research: Collaborative Innovation - examples
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China
WatsonAlmaden
Austin
Tokyo
Haifa
Zurich
India
IBM Research Lab
Global, Smarter Planet Collaborations
Pangoo
Sao Paolo
Melbourne
Nairobi
GOVERNMENT 2.0
NATIONAL RESOURCES

13. © 2013 IBM Corporation
We engage in public/private partnerships, like the EDISON and
ECOGRID projects on Bornholm
§ Total budget: 24 million Euro (EU funding 13 million
Euro)
§ IBM: 171 man months, around 2.2M DKK of servers and
other equipments, IBM SWG products (ILOG, WAS, MQ,
DBMS)
§ Demonstration > 50 % of budget (excl. replication/
deployment)
§ A large scale demonstration of a real-time market place
for distributed energy resources
§ A demonstration of a real power system with more than
50 percent renewable energy
§ To implement ICT systems and innovative market
solutions - offering TSOs additional and more efficient
balancing services
§ To enhance small consumer and local producers to
participate in the power market through real-time
operation, energy storage and savings
§ To make a prototype solution for Europe - offering a “fast
track” option towards market-based Smart Grids in
Europe
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14. © 2013 IBM Corporation
The Smarter Energy Research Institute – a very cost-effective
way of joint research and innovation
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“Think in terms of building
incremental value and creating
a bigger pie, not just getting
the fattest slice”
Steve Steinhilber

16. © 2013 IBM Corporation
Revenue
Growth
GoTo Market activities
Strategic insights
IP Acquisitions
Expanded ecosystems
Credibility & visibility
Infrastructure
Portfolio
Gaps
addressed
Expertise
IBM’s Global Entrepreneurship Program – a win-win
partnership
“Gets”“Gives”
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Entrepreneurs and
start-ups
“Gets” “Gives”

17. © 2013 IBM Corporation
Our experiences: Open and collaborative innovation
§ Open innovation - give to get
§ Open innovation requires organizational
readiness
§ People and their relationships – make or
break
§ A structured approach to open innovation and
partnering helps!
§ Show quick results in partnerships
§ ‘Open’ versus IP protection and first-to-
market. Deal with it
§ Measure results, follow up and adjust
“Every time my folks
ask me for a
strategic alliance,
they ask me to start
loosing money”
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