ACADEMIA

NEW YORK -- J.P. Morgan Chase & Co. finalized with IBM a groundbreaking seven-year outsourcing agreement, in excess of $5 billion, the largest of its kind. The agreement will enable JPMorgan Chase to transform its technology infrastructure through absolute costs savings, increased cost variability, access to the best research and innovation, and improved service levels. By moving from a traditional fixed-cost approach to one with increased capacity and cost variability, JPMorgan Chase will be able to respond more quickly to changing market conditions. JPMorgan Chase will outsource a significant portion of its data processing technology infrastructure, including data centers, help desks, distributed computing, data networks and voice networks. The agreement includes the transfer of approximately 4,000 JPMorgan Chase employees and contractors as well as selected resources and systems to IBM in the first half of 2003. Application delivery and development, desktop support and other core competencies will largely be retained inside JPMorgan Chase. "We view technology as a key competitive advantage. Our agreement with IBM will create capacity for efficient growth and accelerate our pace of innovation, while reducing costs, increasing quality and providing exciting career opportunities for our employees," said Thomas B. Ketchum, vice chairman, J.P. Morgan Chase. "IBM's global strength and computing capabilities, delivered 'on demand', will help us create significant value for our clients, shareholders and employees." IBM Global Services and JPMorgan Chase are creating a virtual pool of computing resources that will be accessed and deployed as needed. The underlying technology, developed by IBM Research, is called Utility Management Infrastructure (U.M.I.). U.M.I. uses advanced software based on open standards to tie together disparate back-end systems, such as different brands of servers and storage devices, without requiring new applications to be written for each separate system. The technology also enhances the availability, reliability and security of IT infrastructure. "We've invested heavily in Research and Development to create 'on demand' technologies that will dramatically change the way IT is delivered," said Doug Elix, senior vice president and group executive, IBM Global Services. "JPMorgan Chase will be receiving a continuous infusion of technology and business process innovations from IBM." J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $742 billion and operations in more than 50 countries. The firm is a leader in investment banking, asset management, private banking, private equity, custody and transaction services, and retail and middle market financial services. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers and the world's most prominent corporate, institutional and government clients. Information about JPMorgan Chase is available on the internet at www.jpmorganchase.com.