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IBM Primes on Demand Growth in Pivotal Small and Mid-Size Business Marketplace

New IBM Express Offerings and Research Capabilities Drive On Demand Business Transformation for Mid-size Companies

NEW YORK - 26 Oct 2004: IBM today showcased a new face to the company's On Demand Business initiative as it hosted more than 100 small and mid-size businesses (SMBs) and IBM Business Partners for a landmark event held here at the Museum of Natural History in Manhattan. Marking the two-year anniversary of the company's most visible and far-reaching initiative, IBM unveiled new offerings, research investments and a targeted advertising campaign to support growing SMB adoption of On Demand Business.

As part of today's announcement, IBM introduced three new Express offerings to help SMBs connect siloed processes and applications while arming employees with collaboration tools that enable real-time decision making based on data and documents shared across the organization. The company also launched a new Express On Demand Business campaign as part of a $200 million advertising push this year to raise market awareness for the IBM Express Portfolio, a set of nearly 70 cross-company offerings uniquely designed for mid-size companies.

According to AMI Partners, the aggregate $300 billion SMB marketplace is the largest and fastest growing segment of the IT industry. Despite limited resources, these companies are spending proportionately more than large enterprises on technology that enables On Demand Business, including double-digit growth in areas like process integration, Linux, wireless and digital content management. The investments come at a time when mid-size companies, more than three-quarters of which support their business with multiple computing systems and platforms, are looking for game-changing ways to leverage economies of scale by connecting their processes and applications with downstream suppliers, customers and Business Partners.

"SMBs continue to demonstrate a keen understanding of the relationship between innovation and profitable growth, whether striving to generate greater efficiencies within their business or overcoming traditional barriers to entry in the broader marketplace," said Marc Lautenbach, General Manager of Global Small and Medium Business, IBM. "Mid-size and smaller companies are not only adopting on demand at a rate faster than larger enterprises but they're applying these solutions in ways that change the nature of competition in the industries they serve."

The Changing Economics of Mid-size Business
In an era when local florists sell perishable wares to customers 10,000 miles away, SMBs continue to search for innovative ways to change the economics of how they do business. Driving 70 percent of new job growth and earning10 times the patents of large companies, SMB's use of technology to overcome traditional barriers to entry such as price points, capital investments and the development of local distribution chains is fundamentally changing the economics of being mid-sized.

To compete in an increasingly global marketplace, particularly as a component in larger supply chains, SMBs are adopting and in many cases pioneering new ways to acquire and deliver their core business process on demand and take greater advantage of economies of scale. Integration with downstream customers and suppliers, often at the behest of larger customers, employee productivity through real-time collaboration and 24x7 operations for even the smallest of companies has created a perpetual On Demand Business environment in which all SMBs must now compete.

As a result, the innovative SMB marketplace has itself become a disruptive economic force that's challenging traditional and long-held business models and practices across industries. Participating in a customer panel here today, David Balik, President & CEO of General Glass, discussed their use of on demand to change the nature of competition in the wholesale and distribution industry.

General Glass, a wholesaler of glass and raw glass materials based in Secaucus, New Jersey, operates a brick and mortar business built on a global supply chain of manufacturers, distributors, general contractors and engineers spanning dozens of countries including China, Indonesia, Turkey, Germany, Brazil and Argentina. General Glass buys raw glass from manufacturers and ships it to distributors and fabricators that tailor it for windows, showers, door panels, tables and other high-end interior applications.

Facing global competition and pricing pressures, General Glass needed to reduce time-to-market, improve customer service and better manage asset turnover by giving sales reps and buyers real-time access to product specifications and inventory levels. Using IBM WebSphere Application Server Express running on an IBM eServer iSeries, General Glass enabled its sales force and prospective buyers to access company inventory, order status, credit management, general ledger, accounts payable and shipping applications online using a standard Web browser.

Also participating in the panel here today, Sherra Pierre, vice president of information systems, Sesame Workshop, discussed the use of on demand services to deliver high-quality programming and media that aids in the educational development of children around the world. Due to outdated analog video equipment and manual asset management processes, the Workshop was facing significant license management challenges for its growing library of digital content, often turning away potential customers and missing shared revenue opportunities with Business Partners.

The answer was an innovative digital content library and archive for Business Partners and customers delivered online using a standard Web browser. Powered by IBM On Demand Business services, the solution allows Sesame Workshop to scale its license management infrastructure while paying only for the computing resources they use. As Workshop digital assets and demand for those assets increase, IBM allocates new resource levels to ensure flexible, secure delivery to customers and Business Partners.

New Express on Demand Offerings for Integration and Collaboration
For a majority of mid-size customers, the On Demand Business transformation begins with the integration of siloed business processes and IT systems, such as best-of-breed back-office applications and disparate operating environments. Global competition, supplier IT mandates and government regulations are just a few examples in a growing list of external market forces driving deeper levels of business integration.

To help mid-size organizations address these challenges, IBM today launched two new platforms designed to make it easier for IBM Business Partners to build and deploy on demand solutions for SMB customers. IBM Integrated Platform Express for Web Application Serving gives customers a platform to develop, deploy and manage dynamic Web sites. The pre-tested bundle includes IBM WebSphere Application Server Express running on IBM eServer pSeries with additional options for IBM TotalStorage, IBM DB2 Universal Database and financing available through IBM Global Financing. IBM Integrated Platform Express for Web Application Serving will be available later this year.

The company also launched IBM Process Integration Solution Express, a business integration platform designed to help customers integrate their internal process and applications to enable the flow of real-time business data across the organization. The offering includes IBM WebSphere Business Integration Server Express and IBM eServer xSeries or iSeries systems with financing and implementation services available through IBM and its Business Partners. IBM Process Integration Solution Express starts as low as $2,259 per month* with financing and is immediately available.

Cirque du Soleil, whose creativity and international mystique drive one of the world's most unique performance arts groups, is using IBM WebSphere Business Integration Server Express running on IBM eServer xSeries hardware to integrate and support its growing business. Headquarted in Montreal, Cirque du Soleil has grown substantially since the company's modest beginning in 1984 as a 73-member local performance arts troupe. Today, Cirque du Soleil entertains millions of spectators each year in dozens of countries across the globe.

"As we touch more communities worldwide, our business needed a deeper level of integration between core processes to support overall growth with the same high quality standards we have for our productions," said Danielle Savoie, CIO for Cirque du Soleil. "The combination of WebSphere Business Integration Server Express and eServer xSeries gives us a scalable on demand environment to integrate our internal systems and back office processes to share real-time business information across the company."

With deeper levels of integration enabling business data to flow horizontally across an organization, a wealth of information opens up to employees, yet their ability to compile, analyze and act in real-time is critical to becoming an on demand business. Traditionally, employees have relied on multiple client-side applications to produce, distribute and share documents with no comprehensive way to collaborate. Related support, maintenance and upgrades further reduce business efficiency and strain the computing resources needed to support numerous stand-alone productivity tools.

To improve employee productivity and organizational responsiveness to business and market changes, IBM announced the future availability of IBM Workplace Services Express, a real-time collaboration and portal offering that brings together people, applications and information from across the company to address critical business issues as they arise. Delivered as an easy-to-use and simple-to-deploy workplace environment, IBM Workplace Services Express allows employees to collaborate and share data from across the company in real-time to make informed and consistent business decisions.

Accessible through any standard Web browser, IBM Workplace Services Express offers customers greater flexibility and choice in how they access and interact with resident applications and data. Pricing and general availability for IBM Workplace Services Express will be announced later this year.

Research Investments in Emerging SMB Markets
Last week, IBM also unveiled the opening of a new research laboratory giving IBM researchers and independent software vendors (ISVs) the ability to co-develop innovative on demand solutions for the more than ten million SMBs in China.

The SMB Innovation Center will be an extension to IBM's China Research Lab (CRL) which will double in size to accommodate the new center. The center will allow researchers and partners to tap into local technical expertise in an effort to better serve SMB customers in China and worldwide. China is the leading market for SMB clients with 99% of companies in the country falling into this category, making it a huge growth opportunity for IBM from a business perspective and an incredible innovation opportunity from a technology perspective.

The SMB Innovation Center will give ISVs and SMB clients unprecedented access to experts on nearly every technical issue they are facing - from hardware to middleware to mobile computing. Conversely, researchers now have a chance to work with Business Partners that understand local business issues. These relationships will allow IBM to build innovative technologies to change how SMBs operate in the global supply chain.

New IBM Express Portfolio Interactive Web Site
IBM also today unveiled a new interactive web site designed to help mid-sized customers understand the value of the company's IBM Express Portfolio of offerings. The ground breaking site features industry specific information allowing customers to find solutions designed specifically designed for their marketplace. The web site can be accessed at www.ibm.com/businesscenter/expressportfolio.

IBM's Express Portfolio
The IBM Express Portfolio offers hardware, middleware, services and financing -- all tailored to the needs of mid-size businesses - that can be acquired, installed and managed quickly, are cost-effective, and deliver a rapid return on investment (ROI). The nearly 70 offerings in the IBM Express portfolio enable customers to improve the responsiveness and flexibility of their IT infrastructure, so they can concentrate on their core businesses. And because cash flow is one of the most pressing issues for mid-sized businesses, the IBM Express Portfolio is more affordable with a series of attractive financing options. To learn more about IBM's Express Portfolio visit: www.ibm.com/businesscenter.

Contact(s) information

Jay Pierce
IBM Media Relations
(914) 766-1420
jpierce2@us.ibm.com

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