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IBM, Dell Announce $16 Billion Technology Agreement

Believed to be Largest Industry OEM Agreement Ever

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NEW YORK - 04 Mar 1999: -- IBM and Dell Computer Corporation (Nasdaq:DELL) today announced a strategic $16 billion technology pact, believed to be the largest agreement of its kind in the information technology industry.

As part of the contract, Dell will purchase storage, microelectronics, networking, and display technology from IBM for integration into Dell computer systems. In the future, the agreement is expected to include IBM's copper, silicon-on-insulator, and other advanced technologies.

The arrangement, which spans seven years, also calls for broad patent cross-licensing between the two companies and collaboration on development of product technology.

Initially, Dell will have access to IBM's high capacity disk drives, network adapter cards, flat panel displays, high performance static random access memory (SRAM) and custom chips.

"The body of Dell-developed product technology, particularly in servers, storage products and notebook PCs, is expanding rapidly," said Mike Lambert, senior vice president, Dell Enterprise Systems Group. "By more extensively pairing IBM's world-class technology with our own, in systems brought to market through our efficient direct business model, we intend to enhance Dell's competitiveness in the global computer systems industry."

"IBM's role as a supplier of advanced technology has grown significantly in recent years, and this agreement is a recognition of the value of IBM's technology leadership in the marketplace," said Dr. James T. Vanderslice, senior vice president and group executive, IBM Technology Group. "It's also further evidence of our commitment to bringing IBM-developed technology to market quickly through a variety of channels and to a wide range of customers."

IBM has identified services, software and the sale of its leadership technologies as key growth areas for the company. Last October IBM created a new organization, the IBM Technology Group, to pursue new growth opportunities and focus additional attention on the OEM marketplace.

Ranked No. 125 among the Fortune 500 companies and No. 363 in the Fortune Global 500, Dell Computer Corporation is the world's leading direct computer systems company, based on revenue of $18.2 billion for the past four quarters. Dell designs, manufactures and customizes products and services to customer requirements and offers an extensive selection of software and peripherals. Information on Dell and its products can be obtained through its toll-free number 1-800-388-8542 or by accessing the Dell World Wide Web site at http://www.dell.com.

IBM is the world's largest information technology company. The IBM Technology Group's mission is to identify and deliver commercial applications for IBM-developed technology in the marketplace. This strategic new group consists of IBM's storage, microelectronics, networking, displays, embedded systems and printing systems units. More information about IBM can be found at http://www.ibm.com.

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