IBM and BMW Group Team to Capitalize on Shift towards Software and Electronics-Based Vehicle Innovation

Bold Competitive Move Spotlights New Industry Era in Global Vehicle Design, Production, Performance and Service

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ARMONK, N.Y. - 21 Sep 2003: IBM and BMW Group have joined forces to concentrate their combined expertise on the worldwide automotive industry's shift from mechanical to primarily software and electronics-based vehicle innovation.

Industry analysts expect the trend to transform the automotive industry during the present decade. They estimate that electronics and software will account for approximately 90% of all future automobile innovation. They also expect the software and electronics share of a vehicle's production cost to reach 40% by the year 2010.

BMW Group's selection makes the automaker IBM's lead customer in a newly defined business initiative called the Automotive Software Foundry (ASF). IBM's ASF solutions for automotive manufacturers and suppliers provide an integrated set of processes, tools and services that enable the evolution from mechanical to more sophisticated software and electronic content in new vehicles. The solution's components cover the entire software lifecycles of autos, including software design, development, testing, integration with automotive production, management and maintenance. Terms of IBM's agreement with BMW Group, which in the first stage include software and consultative services, were not disclosed.

"Our goals with ASF are to help BMW Group keep and strengthen its technology leadership in the field of automotive electronic and software development, speed time-to-market, and help BMW Group drive innovation by improved management of the increasingly complex software and electronic content in cars," said Janette Beauchamp, general manager of IBM's Global Automotive Industry. "In terms of retaining and developing core competencies for a razor-sharp competitive edge, BMW Group and IBM are joining forces to take on a challenge of top strategic importance to the future of the automotive industry worldwide."

Under the agreement with IBM, BMW Group will gain new capabilities to define and control how embedded software and electronic content is used to design, develop, manufacture, and service future vehicle generations.

As a world leader in the design, engineering and production of precision luxury automobiles, BMW Group will work with IBM to:

"By partnering with IBM, we will adopt and implement open-standards based embedded software tools, systems and processes across our extended enterprise that will define a new generation of products and expand business opportunities for our company, "said Mr. Hans-Georg Frischkorn, Senior Vice President for Car Electronics at BMW Group."

IBM was selected by BMW Group as a partner and architect to implement high quality software development processes and infrastructure based on IBM's leadership in software and systems development as well as its ability to provide the integrated processes, tools and training to help BMW Group expand its business through software innovations. IBM's technology and thought leadership in the area of automotive telematics solutions and in-vehicle architecture also qualifies it as BMW Group's partner of choice.


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