IBM Systems and Technology Group IBM Enterprise Linux Server and the System z Solution Edition for Enterprise Linux November 2009 © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server Trademarks The following are trademarks of the International Business Machines Corporation in the United States and/or other countries. IBM* IBM Logo* IBM eServer CICS* DB2* FICON* GDPS* Geographically Dispersed Parallel Sysplex IMS System Storage System z* System z9* System z10 System z10 Business Class zSeries* z/VM* WebSphere* z9* z10 z10 BC z10 EC z/OS*

• Registered trademarks of IBM Corporation The following are trademarks or registered trademarks of other companies. Adobe, the Adobe logo, PostScript, and the PostScript logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States, and/or other countries. Cell Broadband Engine is a trademark of Sony Computer Entertainment, Inc. in the United States, other countries, or both and is used under license therefrom. Java and all Java-based trademarks are trademarks of Sun Microsystems, Inc. in the United States, other countries, or both. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. INFINIBAND, InfiniBand Trade Association and the INFINIBAND design marks are trademarks and/or service marks of the INFINIBAND Trade Association. Intel, Intel logo, Intel Inside, Intel Inside logo, Intel Centrino, Intel Centrino logo, Celeron, Intel Xeon, Intel SpeedStep, Itanium, and Pentium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. UNIX is a registered trademark of The Open Group in the United States and other countries. Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. ITIL is a registered trademark, and a registered community trademark of the Office of Government Commerce, and is registered in the U.S. Patent and Trademark Office. IT Infrastructure Library is a registered trademark of the Central Computer and Telecommunications Agency, which is now part of the Office of Government Commerce. * All other products may be trademarks or registered trademarks of their respective companies. Notes: Performance is in Internal Throughput Rate (ITR) ratio based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput that any user will experience will vary depending upon considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve throughput improvements equivalent to the performance ratios stated here. IBM hardware products are manufactured from new parts, or new and serviceable used parts. Regardless, our warranty terms apply. All customer examples cited or described in this presentation are presented as illustrations of the manner in which some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. This publication was produced in the United States. IBM may not offer the products, services or features discussed in this document in other countries, and the information may be subject to change without notice. Consult your local IBM business contact for information on the product or services available in your area. All statements regarding IBM’s future direction and intent are subject to change or withdrawal without notice, and represent goals and objectives only. Information about non-IBM products is obtained from the manufacturers of those products or their published announcements. IBM has not tested those products and cannot confirm the performance, compatibility, or any other claims related to non-IBM products. Questions on the capabilities of non-IBM products should be addressed to the suppliers of those products. Prices subject to change without notice. Contact your IBM representative or Business Partner for the most current pricing in your geography. 2 © 2009 IBM Corporation

Reed Mullen IBM System z Consolidation and Virtualization Leader © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server Client Adoption Drives Linux Success Installed Linux MIPS at 50% CAGR* ƒ The momentum continues: ƒ Linux is 16% of the System z customer install base (MIPS) ƒ 70% of the top 100 System z clients are running Linux on the mainframe ƒ >3,000 applications available for Linux on System z 4 Total Installed Linux MIPS – Shipped IFL MIPS increased 100% from 3Q07 to 3Q09 Installed Linux MIPS 20 03 20 04 20 05 20 06 20 07 20 08 3Q 09 – Shipped IFL engine volumes increased 62% from 3Q07 to 3Q09

• Based on YE 2004 to YE 2008. © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server Linux on System z Business Perspective A Convergence of Market Forces 1. The adoption of virtualization for consolidation is now the industry norm – Clients are looking to take the next step – very large scale consolidation – But there are challenges: Questions over the scaling of x86 virtualization solutions Speculation over the longevity of some UNIX® offerings 2. Linux on System z has strong acceptance in the market – High level of adoption from existing mainframe clients – Bringing new clients to the System z platform – Underpinning technologies are designed for very large scale computing with the highest Qualities of Services Î The convergence of two forces: – Linux on System z is the ideal platform for clients looking for a large scale consolidation solution 5 © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server Introducing New IBM Offerings for Large Scale Consolidation The Enterprise Linux Server A dedicated IBM System z server for large-scale Linux workloads ƒ Offerings include – – – – – – System z Solution Edition for Enterprise Linux Additional capacity on an installed IBM System z server for large Linux workloads z/VM V5 or V6 Base Product and features:

• DirMaint System z IFLs(1) - Performance Toolkit (2) 16 GB of memory per IFL - RACF Security Server Hardware maintenance for three to five years - RSCS ® z/VM virtualization software package with three to five years of subscription and support Minimum of three 4-Port FICON® cards and two 4-Port OSA cards (ELS ONLY) Clients can optionally add more memory or I/O connectivity ƒ Supported with new promotions from Linux Development partners Novell and Red Hat ƒ Very competitive pricing – Competitive TCA with scalable Linux and UNIX alternatives – Total Cost of Ownership and Qualities of Service that blow away the competition – Pricing starting at under $2,000 per virtual server for large-scale consolidations(2) 6 (1) Entry configurations for ELS are: 6 IFLs for z10 EC, 2 IFLs for z10 BC (2) Subject to maximum server configurations (3) Calculations based on IBM and client experiences. Results can vary. TCA (hardware, virtualization software, memory, maintenance) Entry configuration for EC machine may vary by country © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server IBM Enterprise Linux Server Transforming the Economics for Large Scale Consolidation Enterprise Linux Server (z10 EC) Price per IFL Includes: IFL, 16 GB memory, z/VM, 3 years maintenance and S&S Avg price of IFLs in ELS Incremental price to add an IFL ƒ The new Enterprise Linux Server dramatically reduces the marginal cost of scaling for consolidations Price – The average cost of consolidation declines significantly as the scale of consolidation increases – The marginal price of an incremental IFL can be as much as 80% less than the single IFL price – You don’t have to buy big to save big! Single IFL Price* 6 13 20 28 41 57 Number of IFLs in ELS Machine Note: participation and pricing may vary by country. Unprecedented Economies of Scale for Consolidation on Linux on System z 7

• Based on July 2009 pricing for IFL ($75K) and memory ($2250/GB) with discounted software and hardware maintenance for 3 years. © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server IBM Enterprise Linux Server – z10 BC Pricing Enterprise-Class Linux Virtualization in a Smaller Footprint Enterprise Linux Server Average Price Per IFL for BC Machine Average Price Per IFL (Includes IFL, Maintenance, Memory, I/O Connectivity, z/VM) Approximately $50K per IFL 2 4 6 8 10 Number of IFLs Per System 8 Note: participation and pricing may vary by country. © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server System z Solution Edition for Enterprise Linux Pricing Overview ƒ The focus of SE for EL is to capture large-scale virtualization and consolidation opportunities, not to change the economics of adding a small number of IFLs to an existing machine ƒ For qualifying large-scale Linux consolidation opportunities, the incremental pricing for SE for EL is similar to the incremental pricing characteristics of the Enterprise Linux Server ƒ Significant discounting is available for the sale of multiple IFLs on System z10 EC and BC machines ƒ Refer to your System z playbook for details 9 Note: participation and pricing may vary by country. © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server Value Proposition Summary IBM System z Solution Edition for Enterprise Linux and The Enterprise Linux Server Leverage the ability of Linux on System z to consolidate UNIX and x86 processor cores to unleash significant IT cost savings opportunities ƒ ƒ ƒ ƒ ƒ 10 People Costs – increase the productivity of the IT staff Software Costs – reduce software license fees by consolidating a large number of virtual machines per System z core Energy Costs – dramatic reduction in power usage Facilities Costs – reduce floor space with dense server consolidation on System z Networking Costs – consolidate networks inside the box too © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server – Competitive Perspective ƒ x86 virtualization solutions have some hidden and some not-so-hidden issues – Physical server sprawl is needed to scale a virtualized x86 environment – typically with linear, per-machine pricing – x86 virtual machine sprawl can be difficult to manage, causing operational complexity – Ineffective capacity planning can result in failure to meet service level agreements – Limited core-to-core consolidation ratios and virtual machine mobility requirements can lead to costly software fees – x86 systems do not have a heritage of robust security support – Duplication of hardware is needed for disaster recovery ƒ Enterprise Linux Server provides a superior scale-up system architecture for scale-out x86 applications Consolidate more and spend less with IBM System z – Dynamically expand your system “on demand” – add capacity when you need it, not any sooner, not any later – Enjoy superior operational capabilities for greater levels of command and control – Total Cost of Ownership economics favor server virtualization on ELS, especially when factoring in disaster recovery and server technology refreshes 11 © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server – Next Steps ƒ Introduce IT organizations to the compelling business value of hosting virtual servers on System z with z/VM and Linux ƒ Identify customers who: – Spend too much money on x86 and UNIX server and networking sprawl – Struggle to host I/O and data-intensive workloads in virtual servers with acceptable levels of performance, scalability, availability, capacity planning, or disaster recovery – Are experiencing or projecting IT growth and want a better way to manage that growth ƒ Target “Fit for Purpose” workloads that leverage the strengths of IBM System z – High I/O bandwidth – Rock-solid system security – Cost-effective disaster recovery – Hosting a large number of mixed workloads on the same machine – Database and data serving applications like Oracle are a particular “best fit” for Linux on System z ƒ Partner with Novell and Red Hat for client engagements and new Linux pricing options developed for the Enterprise Linux Server and Solution Edition for Enterprise Linux 12 © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server New Sales Kits IBM System z Solution Edition for Enterprise Linux ƒ IBM: http://w3.ibm.com/sales/support/ShowDoc.wss?docid=G801340M04672E81&infotype=SK&infosubtyp e=S0&node=doctype,S0|doctype,SKT|brands,B5000|brands,B5T00&appname=CC_CFSS ƒ BPs: http://www.ibm.com/partnerworld/wps/servlet/ContentHandler/zSolLinux IBM Enterprise Linux Server ƒ IBM: http://w3.ibm.com/sales/support/ShowDoc.wss?docid=Z079904J61976Z84&infotype=SK&infosubtype =S0&node=doctype,S0|doctype,SKT|brands,B5000|brands,B5T00&appname=CC_CFSS ƒ BPs: http://www.ibm.com/partnerworld/wps/servlet/ContentHandler/zLinuxES 13 © 2009 IBM Corporation

IBM System z Solution Edition for Enterprise Linux and the Enterprise Linux Server Summary, Additional Resources, Contacts Pain Points Spending too much money on energy, cooling, floor space, software license fees; Too many application outages; unable to increase staff productivity Value proposition Take out costs now: consolidate tens-to-hundreds of distributed workloads in order to lower costs and energy consumption; improve staff productivity and increase application availability Client benefits Reduce energy and floor space utilization up to 80% Linux-on-z/VM enables extremely high virtual-to-real CPU ratios: a) do more with less, b) save money on software fees; many clients report staff productivity boosts of 50% Service Offerings IT Optimization Factory – improve time to value and accelerate ROI with ECM-developed automated application migration offering for System z (discover, map, migrate, test) Next steps TCO analysis to demonstrate potential cost savings Key resources System z Consolidation and Virtualization Sales Kit, Linux for System z Sales Kit, Linux on System z Wiki, z/VM 5.4 Sales Kit, z/VM 6.1 Sales Kit, How to engage a Cost & Value, Scorpion, Zodiac, RACE Study Access URLs in slide show mode Key Contacts Carol Stafford, VP System z Sales (cstaffor@us.ibm.com), Reed Mullen, C&V Initiative Lead (mullenra@us.ibm.com), Nancy Scala, Brand Marketing (nancyscala@us.ibm.com), Gerald Hosch, Offering Manager (hosch@de.ibm.com), Katherine Grabarits, zChampion and zAtlas team worldwide contact (kathyg@us.ibm.com) Links Master System z Sales Kit, zChampion website: http://pokgsa.ibm.com/projects/a/applacement/zchampions.html 14 © 2009 IBM Corporation

Patrick Quairoli Novell Technical Alliance Manager © 2009 IBM Corporation

SUSE Linux Enterprise Consolidation Suite for System z for IBM SE Enterprise Linux SLE Consolidation Suite for System z for SLE Consolidation Suite for System z for IBM SE EL “Business Class” Basic IBM SE EL “Business Class” Priority - 2 IFL SLES for System z 3y Basic subscriptions - 2 IFL SLES for System z 3y Priority subscriptions (extend up to 4 IFL subscription) (extend up to 4 IFL subscription) - 2 User access to Novell Online Training Catalog - 2 User access to Novell Online Training Catalog Plus 2 VUE Training Vouchers Plus 2 VUE Training Vouchers - 2 Mono Tools for Visual Studio licenses with - 2 Mono Tools for Visual Studio licenses with 3-year subscriptions 3-year subscriptions - 2 IFL SUSE Linux Enterprise Mono Extension for - 2 IFL SUSE Linux Enterprise Mono Extension for System z 3-year subscriptions System z 3-year subscriptions $39,795.$56,322.SLE Consolidation Suite for System z for SLE Consolidation Suite for System z for IBM SE EL “Enterprise Class” Basic IBM SE EL “Enterprise Class” Priority - 4 IFL SLES for System z 3y Basic subscriptions - 4 IFL SLES for System z 3y Priority subscriptions - 2 User access to Novell Online Training Catalog - 2 User access to Novell Online Training Catalog Plus 2 VUE Training Vouchers Plus 2 VUE Training Vouchers - 2 Mono Tools for Visual Studio licenses with - 2 Mono Tools for Visual Studio licenses with 3-year subscriptions 3-year subscriptions - 2 IFL SUSE Linux Enterprise Mono Extension for - 2 IFL SUSE Linux Enterprise Mono Extension for System z 3-year subscriptions System z 3-year subscriptions $79,999.$113,053.Initial promo period: 12 month, starting with FCS in January 2010 SLE Consolidation Suite for System z offering is stackable, may be purchased multiple times per IBM SE EL system SLE Consolidation Suite for System z only available for incremental new IFL purchases NOT transferable to non-IBM SE EL System-z machines, NOT available for renewal of existing IFLs 16 More information at: http://www.novell.com/mainframe/els © Novell, Inc. All rights reserved. Novell and IBM confidential – for internal use only

SUSE Linux Enterprise Consolidation Suite for System z Value for Customers Customer Benefit Based on SUSE Linux Enterprise Server for System z, the market-leading Linux operating system for IBM Mainframe (10 years of mainframe expertise!) Offers a very attractive initial subscription price (TCA) On IBM SE EL BC allows for growth via entitlement to activate 2 additional IFL Tailored for consolidation of .NET workloads on IBM SE EL systems, and provides .NET development plug-ins into Microsofts Visual Studio (develop on x86 and test and deploy on System z) Includes a Novell training voucher to build up or extend Linux skills of IT staff Only available in conjunction with IBM Solution Edition for Enterprise Linux offering. EFiS Financial Solutions AG runs IBM System z Business Class with SUSE Linux Enterprise Server for System z “We chose an IBM Enterprise Linux Server with a System z Business Class configuration, running SUSE Linux Enterprise Server for System z from Novell for the high reliability, advanced security, extreme scalability and high compute power this solution offers,” said Ernst Bauer, Chief Operating Officer 17 © Novell, Inc. All rights reserved. Novell and IBM confidential – for internal use only

Shawn Wells Red Hat Worldwide System z Director © 2009 IBM Corporation

Linux on System z New Pricing from Red Hat for Solution Edition Bundle ƒ Red Hat Enterprise Managed* Linux – Premium (24x7) – 59% discount – Standard (12x5)– 58% discount – Sold per IFL Current: Net New Current: Incremental ƒ Conditions: – 6 month promotion – No minimum purchase required, no limit on IFLs – Offer valid for EC and BC machines – Renewable at promotional prices ƒ Training Component: RH290 Red Hat Enterprise Linux for Solaris Administrators MSRP: $1,249 USD SE: Net New SE: Incremental Small 4 IFL Large 16 IFL Medium 8 IFL Extra Lg 32 IFL

Students Discount Promo Code 2–3 12.00% 45912 4–5 14.00% 45914 6 SPECIAL BID https://www.redhat.com/courses/rh290_red_hat_enterprise_linux_for_solaris_administrators

• Red Hat Enterprise Managed Linux is a pre-packaged bundle of RHEL plus provisioning and management entitlements to Red Hat Network (RHN), the Red Hat Systems Management utility. © 2009 IBM Corporation 19 2009 IBM Confidential

Linux on System z Red Hat Network • Red Hat’s modular, Web-based Linux management platform z Highly scalable solution z Integrates with existing platforms • Modular approach z Updates – Management – Provisioning – Monitoring Included with Red Hat SE Bundle 20 20 2009 IBM Confidential © 2009 IBM Corporation

Linux on System z Hosted Deployment Model Customer Systems WEB INTERFACE RHN Hosted System Management z Software Distribution z Account Management z Subscription Management z RHN Proxy MANAGED SYSTEMS „ „ „ „ 21 Quick setup is designed to enable management for small deployments All system information, profiles, and packages are stored in Red Hat’s servers Each managed system connects across the Internet for all managed actions RHN Proxy can be added to lower bandwidth use by caching packages locally 2009 IBM Confidential © 2009 IBM Corporation

Linux on System z Satellite Deployment Module •RHN Satellite •RHN Hosted Software Distribution z Subscription Management z • Software Distribution • Channel Management • Monitoring • Provisioning WEB INTERFACE RHN Proxy API LAYER MANAGED SYSTEMS IT Applications „ „ „ 22 Custom Content Local database stores all packages, profiles, and system information Syncs content from RHN Hosted, can run disconnected from the internet Custom content distribution 2009 IBM Confidential © 2009 IBM Corporation

Linux on System z Red Hat Contacts Red Hat/IBM Alliance Directors North America - Jennifer Miller jmiller@redhat.com EMEA – Sebastian Siegert ssiegert@redhat.com APAC – Craig Nielsen cnielsen@redhat.com 23 2009 IBM Confidential © 2009 IBM Corporation