IBM Accelerates On Demand Initiative to Meet Growing Demand

Announces Global Expansion Of Data Centers, New Utility Services, Enhanced Business Partner Program

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ARMONK, N.Y. - 01 Oct 2004: IBM today announced the expansion of its on demand service centers in North America, Europe and Asia to help meet growing marketplace demand. In addition, IBM announced new utility services, including an internal utility offering.
IBM will expand 11 centers in the United States, Germany, Italy, Sweden, United Kingdom, Australia, Japan and Singapore. IBM plans to expand additional centers next year, based on customer demand. The centers join IBM's Boulder, Colo. site as the only facilities in the world to offer a broad range of sophisticated on demand services for data center management.

"Clients today face increasingly complex and costly data center management," said Mark Morin, General Manager, IBM Global Services. "The capabilities we are announcing give clients an on demand infrastructure that eases data center management, which ultimately can help clients drive better business results."

Universal Management Infrastructure
The cornerstone of the expanded centers is IBM's Universal Management Infrastructure (UMI), which helps speed the deployment of critical IT resources. This has become increasingly important as companies need to react quickly to changing market demands and competitive pressures.

UMI is software, architecture and best practices which help IBM and its clients integrate entire data centers, including business processes and related applications on a dynamic, virtual infrastructure. For example, with UMI, multiple business units in a company can pool their infrastructure resources, enabling the company to fully draw on available processing power when it is needed and reduce additional capital outlay. With automated infrastructure provisioning, system administrators can get new applications up and running faster.

UMI is the on demand technology platform which IBM uses for Business Performance Transformation Services (BPTS), traditional IT outsourcing arrangements, remote management of IT systems on client premises, software as a service, and Web hosting. UMI is the foundation for IBM's BPTS service delivery platform, enabling rapid deployment of client solutions, lower cost implementations (through leveraged common components and environments), and security-enhanced scalable environments. UMI provides the standard service delivery platform to help clients reduce the complexity of multiple service environments and allows them to manage their resources according to business policies in an on demand model.

A key feature of UMI is that it supports multi-platform server environments that are characteristic of today's corporate data centers, including HP-UX, IBM AIX, Linux, Microsoft Windows and Sun Solaris. The latest version of UMI features metering capabilities which allow businesses to closely monitor IT usage and acquire computing resources on a pay-per-use basis for select offerings.

New Offerings
IBM also introduced three services enabled by UMI.

For clients who want to build internal utilities and leverage the IBM eServer platform, Tivoli and WebSphere, IBM has created a service to help clients design, build and run their utility computing environment. Called Infrastructure Services Readiness Engagements for Utility Computing, the service allows clients to tap leading modular solutions from IBM as well as expertise and best practices that are included in UMI. The service is available immediately to customers worldwide.

Clients can also access the benefits of UMI via IBM's Flexible Demand Option. This offering enables clients to take advantage of economies of scale by sharing physical assets, each operating in security-enhanced partitions, paying for the computing capacity based on what they use. With the IBM Flexible Demand Option, customers gain the experience, technology, and reduced costs IBM is uniquely able to provide. Customers receive usage-based, variably priced provisioning of server, storage and network resources, balanced workloads, porting and testing, and management and reporting capabilities. The service is available immediately to customers worldwide.

For clients who want to leverage industry-leading best practices for CRM, Siebel and IBM have introduced the first hosted CRM solutions specifically designed to address core business processes for the financial services, high-tech, life sciences, and automotive industries. The solutions will be available later this year.

Customer Momentum
In Europe, Nordea, the leading bank in the Nordics, selected IBM to transform and consolidate the bank's overall IT production services into an on demand infrastructure in a 10-year, EUR 2.2 billion IT services agreement. Together, the companies have created Nordic Processor, a joint venture partnership that focuses on getting the best out of the relationship between the two companies.

"Last year Nordea signed an important IT services agreement with IBM to enable the transformation of our IT infrastructure," said Markku Pohjola, Group CEO and Head of Group Processing and Technology, Nordea. "IBM is consolidating eight of our data centers in Sweden, Denmark, Norway and Finland into two data centers in Sweden using the latest technology, architecture and best practices to ensure Nordea drives efficiencies and resilience for our banking operations. IBM's on demand data center will provide Nordea with the ability to improve flexibility, contain costs and reduce capital investment."

Nordea is a world leader in internet banking, with more than 3.5 million e-customers. IBM's on demand solution will enable Nordea to closely measure and monitor IT usage, thereby ensuring Nordea's customers have access 24/7 to Nordea's internet banking services.

Business Partner Momentum
IBM relies on two key elements to effectively deliver software as a service -- UMI and Business Partners. IBM works with leading independent software vendors (ISVs) and application providers to assess, transform and deploy their software as a service to hundreds of customers and thousands of users worldwide. IBM announced it has doubled its software as a service Business Partners in the past six months, to more than 60.

IBM also announced that it has expanded its Application Enablement Program (AEP) to deliver new enablement resources to help Business Partners plan and prepare for the business impact of delivering software on demand. New enablement resources include financial workshops, virtual education resources, tool kits, sales kits, solution templates and platform guides.

As customers increasingly temper the importance of software functionality with how they acquire and pay for it, software providers are being asked to deliver applications in new and less-costly ways. According to IDC, sales of subscription-based and hosted software will grow at 17 percent and 26 percent, respectively, through 2007. By delivering software on demand, ISVs and USPs can tap into the growing marketplace for subscription-based and hosted applications while experiencing faster application deployment and shorter overall sales cycles.

With the deployment of UMI in 11 delivery centers around the world, software as a service will now be more accessible to clients everywhere. This increased deployment also creates additional opportunities for Business Partners around the world to sell software as a service. Business partners are a key channel in selling this service, and the increased availability makes it easier for them to sell.

For example, Siebel Systems provides Siebel CRM OnDemand, a leading hosted CRM offering that has gained rapid momentum and market acceptance by customers of all sizes, around the world. Hosted by IBM and available over the Web from an internet browser, Siebel CRM OnDemand delivers complete sales, marketing, service, and analytics functionality with included training and support at a fixed price per user per month, with no up-front investment.

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