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Cisco and IBM Announce Technology, Networking and Strategic Services Alliance

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Armonk, N.Y. & San Jose, Calif - 31 Aug 1999: -- IBM and Cisco Systems, Inc. today announced a global alliance composed of a $2-billion technology agreement, a strategic relationship with IBM Global Services, and the acquisition by Cisco of portions of IBM's networking intellectual property.

Through these agreements, the two companies will deliver a powerful combination of networking solutions, technologies and services to businesses and service providers worldwide. Today's agreements include:

-- A strategic alliance between IBM Global Services and Cisco. The two companies will offer a full spectrum of services and jointly developed solutions for customers' e-business and networking needs. Cisco customers worldwide will also have greater ability to use IBM Global Services to support their Cisco products;

-- Acquisition by Cisco of routing and switching intellectual property from IBM's Networking Hardware Division, and the joint development of offerings to provide a smooth transition for customers to implement Cisco networking solutions. IBM will provide ongoing support of its routing and switching products for existing customers, and will continue to offer and support Systems Network Architecture, Token Ring solutions and Ethernet adapters through its worldwide sales and distribution channels;

-- An agreement by Cisco to purchase IBM technology over the next five years.

"As customers move from traditional business models to become e-businesses, they need assistance and leadership from their technology providers," said Dr. James Vanderslice, senior vice president and group executive, IBM Technology Group. "Through this new alliance, we will provide that leadership by combining IBM's strengths in servers, software, services and technology for e-business with Cisco expertise in networking technology."

"The Internet is reshaping the fortunes of all businesses and we believe this alliance between Cisco and IBM will bring great value to our mutual customers by partnering to migrate them toward New World Internet-based business processes," said Selby Wellman, senior vice president, Interworks Business Division at Cisco Systems. "Consistent with the Internet Ecosystem, this alliance demonstrates a significant opportunity for customers to utilize Cisco's portfolio of end-to-end network solutions, and IBM's technology and the reach of its worldwide services to seamlessly move business to the Internet."

"Building a powerful network is key to global expansion and e-business strategies," said Sam Palmisano, IBM senior vice president and group executive, IBM Global Services. "Through our strategic alliance, customers will be able to readily leverage Cisco products and IBM services to quickly deploy, optimize and maintain Cisco-based networks."

Companies will now be able to turn to IBM Global Services for all of their Cisco support needs -- from network consulting and design, to procurement, implementation and maintenance. As part of this support, IBM Global Services will continue to substantially increase its specialists' certified Cisco skills to assist customers worldwide with their network solutions and migrations. IBM Global Services and Cisco will provide service providers and business customers with an expanded set of network solutions to address their e-business requirements, open Internet-based architectures for data, voice and video services, and enterprise management. IBM Global Services will participate in Cisco's Global Support Partner Program, Gold Partner Certification Program and Cisco Voice Application Partner Specialization which are focused on technology collaboration and cooperative sales and marketing.

By complementing each company's core strengths, this alliance will allow IBM and Cisco to deliver solutions that provide enhanced network and systems performance. Customers becoming e-businesses demand higher levels of security, availability and applications performance. IBM and Cisco will collaborate in areas such as business policy management to provide infrastructures that speed the deployment of e-business capabilities to deliver these higher levels of services.

This partnership will provide customers with greater flexibility in developing mid- to long- term networking strategies through an expanded product portfolio. In addition, it will allow companies to quickly and easily implement next-generation networks through a combination of new services. To assist customers with a smooth transition to Cisco Internet solutions, the two companies will also establish project offices to identify and handle joint customer opportunities, and establish interoperability labs to test solutions.

Portions of this alliance are subject to governmental reviews.

Cisco is the worldwide leader in networking for the Internet. For more information, please visit http://www.cisco.com.

IBM is the world's largest information technology company. For more information, please visit http://www.ibm.com.

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