IBM Helps FLAX Art & Design Draw Up New Technology Infrastructure

SAN FRANCISCO, CA - 05 Oct 2006: IBM (NYSE: IBM) announced today that FLAX art & design replaced its HP server infrastructure with the "all-in-one" System i, IBM's premier applications platform for small and medium sized business customers, reducing its operating costs and gaining the ability to more flexibly support the seasonal requirements of its business.

FLAX art & design is a family-owned business that provides creative supplies via its Web site, mail order catalogs and flagship retail store in San Francisco, which opened in 1938. FLAX not only offers customers myriad art supplies, but art-inspired items ranging from housewares to clothing. FLAX is also considered a catalog industry leader in the adoption of cutting edge technologies, being a pioneer in the implementation of digital catalog production and the modeling methods of its mailing list.

To support its growing business, FLAX needed a more robust retail solution as well as a modern replacement for its legacy HP e3000 server. FLAX turned to CommercialWare, an IBM Business Partner and provider of cross-channel retail commerce solutions, who in turn introduced the company to the unique capabilities of the IBM System i.

"We just wanted a reliable technology system that we could plug in and not worry about," said Howard Flax, CEO of FLAX art & design. "HP approached us about adopting an HP-UX platform to replace the e3000, but we chose CommercialWare and IBM System i because they haven't wavered in their commitment to an integrated solution. The System i is very easy to use thanks to its integrated database and simple systems management."

Using System i, FLAX was able to lower its operating costs because -- unlike its former architecture -- the CommercialWare application suite and System i solution doesn't require any ongoing programming. As a result, FLAX has more time to focus on new projects that help it expand the business instead of just maintaining applications.

For example, FLAX does approximately 50 percent of its business during the holiday season, when the company grows from 100 to 160 or more employees. FLAX is currently expanding its line of holiday merchandise to meet demand and also adding more items to its hugely successful children's line.

To support these efforts, FLAX runs its business primarily on a System i, with built-in hardware, software, database and storage to run the CommercialWare application that powers FLAX's call center and Web site -- which allows guests to take a tour of the company's flagship store or order from some 4,000 items -- as well as manages such other critical activities as order tracking, order history and inventory availability.

The System i comes complete with IBM WebSphere software applications that allow FLAX to easily communicate with its award-winning Web site. Enriched by advanced imaging and search solutions, FLAX was the first online retailer to successfully integrate interactive rich media and Web 2.0 technologies. The site also uses the latest in encryption technology and authentication to ensure that a customer's personal information is secure. In addition, FLAX art & design houses Digital IDs on the System i. These certificates are similar to a driver's license, passport or membership card and verify the identities of all the parties involved in each order.

"Companies are concerned with growing their business and meeting customer demands reliably and securely," said Mark Shearer, general manager, IBM System i. "IBM is committed to introducing customers dissatisfied with HP and its decision on the HP e3000 to a system that is easier to use and less expensive to own than what they are used to -- the IBM System i. Unlike HP, IBM has continued to invest in its small and medium sized business platform by bringing technologies like PHP, IP Telephony and virtualization to the System i."

FLAX is currently considering using System i virtualization capabilities to realize additional efficiencies, further simplifying its ability to run multiple applications on one system. IBM's Virtualization Engine technology is embedded within the System i and uses advanced technology to help ensure that critical applications get the IT resources they need and maximize system usage while reducing support costs.

Small and medium size business clients like FLAX are now embracing virtualization at the same rate as large businesses. A recent IBM customer survey found that as many as half of all small and medium-sized customers are either currently using virtualization technology or are planning to implement at least one virtualization function within the next year.

For more information on FLAX art & design, visit http://www.flaxart.com.

For more information on CommercialWare, visit http://www.commercialware.com.

For more information on IBM System i, visit http://www.ibm.com/systemi.

The following are either trademarks or registered trademarks of International Business Machines Corporation in the United States or other countries or both: IBM, the IBM e-business logo, System i, and System i5. For a list of additional IBM trademarks, please see www.ibm.com/legal/copytrade.shtml

All others are trademarks or registered trademarks of their respective companies. Statements concerning IBM's future development plans and schedules are made for planning purposes only, and are subject to change or withdrawal without notice.

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