IBM Taps Boom in Linux Growth by Expanding Commitment to Partners, Linux and Open Source

Growing Adoption of IBM's Open Platforms Elevates Novell and Red Hat to Highest Tier of Integrated Strategic Alliances

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ARMONK, NY - 14 Dec 2005: Building upon the company's commitment to Linux and the Open Source Community, IBM today announced Novell and Red Hat have been elevated to IBM's Strategic Alliance program -- IBM's highest tier partner status. The move will make it simpler for clients to acquire open standards-based Linux hardware, software, and services through integrated and streamlined sales, distribution and services channels.

Today's announcement includes:

-- Opening significant new channels and access to IBM innovation centers to Novell and Red Hat, including those in emerging countries like Brazil, Russia, India, China and Korea to drive more open source deals in those booming markets. -- Enhanced New subscription models combining IBM offerings with Novell and Red Hat solutions. -- Support by Novell and Red Hat of IBM's open platforms including the Java-based Apache Geronimo web server and Apache Derby database, and continued support of the Eclipse development platform.

With today's news, the companies are reinforcing their commitment to the Java community, which comprises more than six million developers worldwide. Additionally, the companies will help customers begin to deploy Service Oriented Architectures (SOA) based on a J2EE application environment. SOA can give businesses the flexibility to easily integrate information with custom third-party business process applications regardless of the underlying technology, freeing clients from relying on any single information technology vendor.

Today's announcement represents the most significant elevation of IBM's strategic partnerships with its key Linux Distribution Partners since it embraced Linux six years ago, a testament to a Linux market that continues to experience strong growth. According to IT industry firm IDC, the overall Linux marketplace is growing annually at 26 percent and is expected to reach $35.7 billion by 2008. [1] IBM now ranks number one in overall Linux-based server revenue worldwide with 29.7 percent of the revenue, up 32 percent year-to-year, according to Gartner, an industry research firm. [2]

IBM Business Partners contribute over one third of IBM's Linux revenue. The ecosystem around these two alliances contributes to IBM's growth and represents the core of IBM's strategy of offering innovative open standard solutions that combine open source technology, IBM commercial products, and IBM's industry expertise. The alliances are timed to tap the boom in IBM's Linux growth expanding its base of 12,000 enterprise deployments worldwide in key industries like government, retail, health care and financial services, as well as emerging global markets.

IBM Embraces Subscription Model for Linux and Open Source

Currently, customers can purchase Linux directly through Linux distributors like Novell and Red Hat. As part of a tighter alignment between the companies, IBM is building a new team dedicated to marketing and accepting orders for Linux subscriptions from Novell and Red Hat. These one and three year Linux server subscriptions will be available on IBM server hardware, or with IBM middleware, and IBM Services' SupportLine offerings, providing support for the Linux operating system running on both IBM and non-IBM server hardware. The new subscription model is aimed at benefiting IBM's large enterprise and small and medium business (SMB) clients desiring to purchase operating system subscriptions and support as part of a more comprehensive industry-specific solution from IBM.

Builds Industry Momentum for Open Source Technologies

Under the terms of the Strategic Alliance agreement, Novell has agreed to distribute the Apache Geronimo open source J2EE application server as part of its SUSE Linux Enterprise Server distribution, which contains more than 1,400 open source software packages. Novell currently includes the Apache Derby database in SUSE Linux 10.0.

The software provides mid-sized businesses, departments in large enterprises and Business Partners with easy access to open source-based technologies with no up-front costs. Red Hat will work with IBM to certify IBM's version of the Geronimo application server -- WebSphere Community Edition -- for Red Hat offerings and Red Hat will also support IBM's efforts to promote Apache Geronimo.

The agreement with Novell for Apache Geronimo and Apache Derby, and cooperation around these technologies with Red Hat, promises to greatly increase the volume and acceptance of these technologies and more importantly will greatly expand the market opportunity for the industry and deliver value to customers from these open standards and open source technologies. Combining the Linux distribution strategy with these additional Apache open source technologies provides a pervasive software platform which can help Java developers, small and mid-sized businesses (SMB) and departmental users reduce the complexity of application development and deployment by pre-integrating the most common services to build mainstream Java applications.

Novell plans to include Apache Geronimo in its next SUSE Linux Enterprise Server distribution to be delivered in 2006, and Red Hat will support IBM in its efforts to promote Apache Geronimo. Both companies have also agreed to help promote Apache Derby, a Java-based relational database that IBM contributed to the open source community in August 2004 to help developers more easily build and deploy applications and workloads that require an embedded database. Examples of such solutions include small web sites, point-of-sales systems, local registries and repositories, and small departmental applications.

"IBM made a big commitment to our customers and our open source strategy when we told the world we were making a substantial investment in Linux nearly six years ago. That included partnering with Red Hat and Novell," said Mark Elliott, general manager, Global Solution Sales, IBM Sales and Distribution. "Our customers responded with incredible enthusiasm and today IBM's Linux business is growing faster than the industry. And that growth is propelling Novell and Red Hat to the top tier of IBM's strategic alliance partners."

"Novell has led the industry in cross platform support for IBM server platforms," said Ron Hovsepian, president and chief operating officer of Novell. "SUSE Linux Enterprise Server runs across the full range of IBM platforms, from Intel and AMD-based servers to POWER PC up to the mainframe, and we have an active technology and go-to-market and sales partnership with IBM. This announcement further deepens that relationship, and marks another aggressive step forward for Novell and IBM in driving Linux into enterprise environments."

"Red Hat is pleased to be expanding our partnership with IBM in ways that will benefit both large enterprise and SMB customers," said Tim Yeaton, senior vice president of Worldwide Marketing at Red Hat. "In addition, IBM's development of a dedicated sales channel and commitment to market and accept orders for our platform will broaden the reach of Red Hat Enterprise Linux and further our leadership position in the open source marketplace."

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1 [1] IDC

2 [2] Gartner Quarterly Statistics, Server Market 3Q05.