IBM Announces Formation of Venture Capital Advisory Council

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ARMONK, NY - 22 Aug 2005: IBM today announced the formation of a new Venture Capital Advisory Council made up of venture capitalists from some of the world's leading venture firms. The new council will work with IBM to accelerate innovation around the deployment of open standards based solutions, particularly in emerging markets.

The council will also provide feedback on how IBM can continue to identify new partnership opportunities and help evolve its partner programs to best assist the hundreds of new and innovative startup companies arising out of these countries daily. This includes reviewing the best ways to provide startups with access to IBM's industry leading technology, marketing and sales resources.

Members of the council will initially include venture capital partners at Accel Partners, Darby Overseas Investments, Ltd, Draper, Fisher and Jurvetson, Hummer Winblad Venture Partners, 3i, U.S. Venture Partners, and Walden International. Council members will gain access to top executives, decision makers and experts from IBM's hardware, software, services and research units.

The Venture Capital Advisory Council will meet throughout the year to review opportunities for startups in IBM's partner programs. On a regular basis, new VCs will be invited to join based on their expertise in technologies, key trends in emerging markets and the synergy of their strategic investments to IBM's growth strategy.

Helping Startups in Emerging Markets
The adoption of open standards based solutions in the emerging markets of Brazil, Russia, India and China has been a consistent priority for IBM. Already there has been a dramatic shift occurring in the marketplace as governments in emerging markets move away from proprietary technology to open source solutions.

"Our unique partnership model with VCs and their portfolio companies is creating value for our customers and business partners by accelerating deployment and integration of their IT components built on open architectures and with open standards," said Claudia Fan Munce, vice-president of corporate strategy and managing director of the Venture Capital Group. "With today's news, IBM is looking to continue to enhance its efforts to ensure that we are helping our partners be successful in their markets."

IBM's venture capital efforts are a unique differentiator in the marketplace. While traditional corporate venturing models that focus strictly on direct investments are rapidly disappearing due to lack of ROI and strategic synergy with the parent corporation, IBM's VC efforts are focused on building partnerships and have led to rapid growth of our innovation ecosystem.

Since its formation in early 2000, IBM partnerships with VC backed startups have jumped from 20 to more than 850 in the past 18 months. The impact is clear when one considers that IBM's business partnerships account for one-third of company revenue. Today, IBM has successful relationships with over 100 of the world's leading VC firms. The new council gives IBM a more focused and formal way to have a conversation on accelerating innovation in emerging markets.

"IBM offers our business partners the broadest range of programs, and marketing and sales resources to help them succeed," said Buell Duncan, general manager of Independent Software Vendors (ISVs) and Developer Relations. "As we continue to focus our efforts on key areas such as healthcare, pervasive computing, Linux and emerging countries, we need to ensure our partnership strategy is aligned perfectly to accommodate the burst of innovation that is rapidly occurring."