IBM Unveils New Research Innovation Center for Small and Mid-Size Businesses in China

Company Moves to Capture Share of Largest SMB Market In World; Continues Global Push to Address Fastest Growing Opportunity

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BEIJING - 21 Oct 2004: IBM today announced the opening of a new innovation center, giving IBM researchers and independent software vendors (ISVs) access to over ten million small and mid-sized businesses (SMBs) in China. IBM is providing ISVs with resources to develop open solutions designed to help SMB customers improve their global supply chain. The opening is the latest move by IBM to expand its share of the $300 billion global SMB marketplace opportunity for information technology.

The SMB Innovation Center will be an extension to IBM's China Research Lab (CRL) which will double in size to accommodate the new facility. 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 marketplace for SMB clients with 99% of companies in the country falling into this category, making this a huge growth opportunity for IBM from a business perspective and an incredible innovation opportunity from an open standards technology perspective.

One of the major challenges SMBs in China are facing is the need to improve connectivity with suppliers, partners and customers. As the global supply chain continues to grow and get more complex, it is critical for SMBs to use innovative and open solutions to more efficiently conduct business with suppliers and clients all over the world. With the average China SMB conducting business with approximately 485 customers each month, China is considered to be at the epicenter of the world's global supply chain. IBM's focus on enabling SMBs in China to work more efficiently can in turn improve the worldwide supply chain network.

"Whether dealing with enterprise clients or SMBs, IBM researchers look for access to the toughest problems facing businesses today," said Cathy Lasser, Vice President of Emerging Business, IBM Research. "Establishing this center gives our researchers direct access to new and unique problems which can lead to innovative, open and first-of-a-kind solutions for our SMB clients around the world."

IBM has taken significant steps to better serve the worldwide SMB marketplace over the past two years. The company established the On Demand Express Portfolio of offerings and solutions specifically priced and designed for SMB customers. IBM also has expanded it relationships with ISVs worldwide through the ISV Advantage for SMB program. The business results show these steps are paying off with the IBM SMB sales organization accounting for 20 percent of IBM's revenues.

The new center will provide IBM with yet another competitive advantage in the SMB marketplace as no other IT company in the world has the breadth of technical expertise shared across IBM's 3,000 researchers in eight labs around the world. The innovation center is a resource for ISVs and SMB clients to have 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 partners who understand the local business needs. These relationships allow IBM to develop innovative and open standards-based technologies that can change the way SMB clients operate throughout the global supply chain.

"Finding pockets of innovation and growth in the global SMB marketplace is vital to our strategy," said Dave Carlquist, Vice President of Global Emerging Marketplaces, IBM. "Bringing the deep marketplace perspective and expertise of our ISV partners in China together with the innovative thinking of our IBM research teams is a powerful statement of our commitment to better serving the unique needs of SMB clients worldwide."

In a pilot project at the new SMB Innovation Center, researchers are working with efuture, a leading ISV for the retail industry in China, to develop a next generation retail solution combining the strengths of IBM's hardware and middleware with efuture's supply chain management applications. While this specific solution is designed to help SMBs in China's retail industry, the infrastructure was developed in such a way that allows for integration with other ISV applications, making it of value to ISVs and SMBs around the world.

"This center is a breeding ground for innovation in the global SMB marketplace," said Yan Yanchun, CEO and director of the board of efuture. "Having access to IBM's world leading researchers and technologies gives us the opportunity to develop ideas and solutions that would never be possible before."

By opening this lab, IBM Research is now teaming its technical experts with ISVs, like efuture, who understand the local marketplace conditions, business issues and technical frustrations. The powerful combination of the technical knowledge and marketplace intelligence is key in capturing the global SMB opportunity.

The new lab will be strategically located near the Beijing University and Tsinghua University, two of the top technical universities in Asia. This new location will give IBM researchers, and the ISVs working in the new center, an opportunity to work with the next generation of technical leaders on cutting-edge solutions for SMBs.

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