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IBM Shrinks Integrated Blade Computing System for Smaller Firms

IBM Adapts Breakthrough “Blade” Paradigm to Help Slice IT Footprint by up to 80%, Reduce Energy Use and Complexity for Firms with Fewer IT Staff

ARMONK, NY - 13 Jun 2007: IBM (NYSE: IBM) previewed today the industry's first blade computing system designed to help smaller firms simplify the management of technology needed to operate a small business -- from servers, to phone systems and antivirus applications -- in a single system. IBM's new BladeCenter "S" can help reduce the 25 to 45 servers used by an average mid-size company by up to 80 percent.

IBM BladeCenter S is "right-sized" to sit on a desktop, plug into a standard 110 volt power outlet often found in home offices, and manage storage and up to six blade servers at a time. Designed to integrate applications most commonly used for business functions -- such as antivirus/firewall, voice over IP, email, collaboration, back-up and recovery and file and print applications -- the new system is intended to run in a typical office environment.

IBM BladeCenter S has also been designed to minimize IT administration. The system can be configured for the first time similar to how a consumer would set up a home PC. Following a "wizard-based" installation interface a user can literally plug the blade servers into the system, plug the system into a power outlet, and launch a management tool that enables easy select-and-click configuration via an "express" install. For businesses operating branch offices -- such as retailers or financial institutions -- IT administrators at headquarters can easily pre-configure hundreds of blade systems to operate in the same manner and ship them out the door knowing an office employee will be able to simply plug a system in and power it up.

According to industry analyst firm Gartner, mid-size businesses run 25 to 45 servers on average to power business functions.(1) Approximately 10 of those servers are typically appliances designed to perform a single or specialized set of server functions such as storage, security and Web serving.(2) Integrating these functions, along with storage, into one BladeCenter system, can help businesses dramatically reduce the physical server sprawl associated with typical data centers and potentially reduce the IT staff needed to manage the applications essential to operating day-to-day business functions.

"Growing businesses with constrained resources have been grappling with ways to leverage technology advances to improve their competitive advantage without increasing costs," said Alex Yost, vice president and business line executive, IBM BladeCenter. "IBM's introduction of a purpose built BladeCenter for small offices and distributed locations will now help smaller firms get the simplification and integration that the biggest companies have been getting from blades, in a package that is optimized for their business. IBM BladeCenter is the right choice for customers looking for open, green and easy IT integration."

Economics of Blade-Based Computing Reaches a Tipping Point

Blade computers -- which integrate servers, storage, networking and applications into one system -- were initially designed to help large enterprises break from conventional methods of business computing that resulted in the proliferation of server "farms," large IT staffs to manage them and wasted energy resources.

In the five years since IBM first brought BladeCenter to market, the industry has evolved the simplified computing platform from its role powering front-end web serving applications to a commanding presence in high performance supercomputing environments.

IBM's move today to radically expand the blade industry means that a significantly broader set of customers will now have the opportunity to leverage the integration, flexibility and ease of management blade computing brings to help improve their competitive advantage in the marketplace. The action will further fuel the fastest growing server market in history towards its predicted growth from $3B to $11B by 2010.(3)

Mid-sized clients in multiple industries have already reaped the rewards of blades-based computing to improve their operational efficiency and free up IT resources to grow their businesses. Based just outside of Philadelphia, Devon Health Services, Inc. employs 150 and operates a core business of healthcare claim processing. Healthcare claims processing poses unique IT challenges for the company since it works with multiple medical partners that conduct file exchanges in various formats and management of large volumes of data is often time critical.

Devon Health had been adding servers to keep up with the company's IT demands over the years, creating a mixed-vendor environment that included over 30 Dell and HP rack servers that in most cases ran no more than one application each. "We got in that rhythm where we were buying a new server with every new application," said Charles Falcone, president, Devon Health. "One day our IT staff was in the middle of a project to upgrade a mission-critical application for our business -- a repricing software product that handles 80 percent of the company's workflow -- when we made an alarming discovery -- we had literally run out of power."

When an electrician informed Devon Health's IT staff that the company was actually drawing more power than the circuit breaker was rated for, the team realized it was time for a new solution. To reduce systems management complexity and address a critical shortage of energy resources, Devon Health migrated its core enterprise applications to a single IBM BladeCenter system with 6 blade servers. Today a staff of one IT administrator manages the company's file server, Web server, print server, database server, CRM application and backup domain controllers, all housed in one integrated BladeCenter system, while pursuing other technology projects that actually generate revenue for the business.

About IBM BladeCenter

IBM has the broadest portfolio of blade offerings in the industry, including five blade enclosures, five compatible server blades and five I/O fabrics with a common architecture that allows clients to mix and match offerings. IBM has also taken a unique approach in the industry by opening up the IBM BladeCenter hardware architecture, which has created market and revenue opportunities for hundreds of companies selling peripherals like network and storage cards, switches and software. Since opening the BladeCenter specifications in 2004, 500 companies have downloaded the specifications for free.

IBM BladeCenter S is expected to be available in the fourth quarter of 2007. For more information about IBM BladeCenter, please visit: www.ibm.com/bladecenter.

For more information on today's announcement, see the complete press kit at http://www-03.ibm.com/press/us/en/presskit/21704.wss.

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Contact(s) information

Vineeta Durani
IBM Media Relations
415-545-2350
vdurani@us.ibm.com

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Servers
System i, System p, System x, System z, BladeCenter, and Supercomputers

1 Gartner: User Survey Analysis: SMB PC and Server Plans, North America, 2006, by James A. Browning, John Enck and Mark A. Margevicius, November 9, 2006.

2 Gartner: User Survey Analysis: SMB PC and Server Plans, North America, 2006, by James A. Browning, John Enck and Mark A. Margevicius, November 9, 2006.

3 IDC: Worldwide and U.S. Blade Server 2006-2010 Forecast and 2005 Vendor Shares.

All statements regarding IBM's future direction and intent are subject to change or withdrawal without notice, and represent goals and objectives only.

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