GOVERNMENT

Announces Customers Can Earn More Than $500,000 in Migration Services on Competitive Trade-Ins; POWER6 Becomes First Processor to Achieve 5 GHz Barrier: At a customer event in San Francisco yesterday, IBM announced two high-end Power Systems models -- the world's fastest UNIX server and a unique water-cooled supercomputer. The new systems offer sophisticated IBM virtualization technology and energy-saving capabilities to help dramatically reduce bottom-line operating costs, such as those for energy, floor space and systems management, while improving system performance, helping customers transition to a new enterprise data center. The new UNIX enterprise server, the Power 595, designed to extend IBM's leadership in the UNIX market, will be attractive to existing IBM clients as well as Sun Solaris and HP UNIX users. For example, IBM's Power enterprise 64-core server delivers twice the performance at a comparable price as a similarly configured HP Superdome Itanium system. IBM's new POWER6 "Hydro-Cluster" supercomputer, the Power 575, is built to help users tackle some of the world's most challenging problems in fields such as energy, aerospace and weather modeling. The new super-dense system, representing a breakthrough in green IT, uses a unique, in-rack, water-cooling system and with 448 processor cores per rack offers users nearly five times the performance and more than three times the energy efficiency of its predecessor, IBM's POWER5+ processor-based p575 supercomputer. Beginning today, customers will be able to leverage the world's most powerful microprocessor, POWER6 -- with new world-record speeds of up to 5 GHz -- in these new systems, leading to significant performance improvements across a wide array of applications. These advanced processors deliver two-to-three times the performance per core of comparable HP or Sun processors. And significant energy conservation design improvements enable POWER6 to deliver twice the performance requiring nearly the same amount of electricity to run and cool it as its POWER5 predecessor. These offerings are an important element in helping clients develop a new enterprise data center, which offers dramatic improvements in IT efficiency and provides for rapid deployment of new IT services to support future business growth. IBM is helping clients move to new enterprise data centers by focusing on best practices around virtualization, green IT, service management and cloud computing. New Generation of Power Systems The two new computers are part of a comprehensive launch of a new generation of IBM Power Systems that began last week. The launch also includes new milestones, an update to an aggressive UNIX migration program, a Power 570 refresh and Power Systems software updates including:

• A milestone of successfully migrating more than 1,000 clients from competitive platforms to IBM Power Systems - resulting in nearly $1 billion in revenues.
• A new aggressive IBM Power Rewards migration program allowing customers to earn rewards points by trading in selected HP or Sun UNIX systems. Customers trading in a PA-RISC based HP Superdome system, for example, can earn as much as $512,000 in migration services at no additional charge.
• PowerCare – a new services option included with every Power 595 that allows customers to more easily get no-charge, quick-start help from IBM when exploiting differentiating features of Power Systems, such as advanced virtualization, energy efficiency, increased security, or high availability.
• A new IBM Power 570, a popular midrange system, which is a unified version of the already in-market POWER6 processor-based System p 570 and the System i 570. Existing customers can update to the new system at no-charge.
• More Power Systems Software alignment across UNIX, IBM i, and Linux operating environments, including the new PowerHA family for high availability products.

Companies around the world have saved money by migrating from competitive UNIX servers and consolidating on IBM Power Systems. For instance, Energen, one of the top 20 independent oil and gas exploration and production companies in the United States, was able to save more than $500,000 annually by consolidating 20 Sun servers onto two System p 570 servers. The project accelerated new server deployment from one month to two days. "The server consolidation project was hugely successful," said Brunson White, vice president and CIO of Energen. "We have never completed a project that has so quickly generated as much return on investment as this one. And we achieved increased system performance as well." "Today's announcement of incredibly high-value UNIX and supercomputer solutions, coupled with last week's announcement of the first of a new generation of servers that takes our System i clients forward on a mainstream platform, opens up a whole new world of possibilities for our Power Systems clients," said Ross Mauri, general manager, IBM Power Systems. "The world's most powerful enterprise UNIX server with superior virtualization for workload balancing across UNIX, Linux and i applications and the water-cooled supercomputer represent major breakthroughs in innovation and energy efficiency for IBM clients and make the new enterprise data center a reality. Sun and HP UNIX customers just might discover the new Power Rewards program is the impetus to make the switch to the Power roadmap." Leading UNIX Provider According to IDC, IBM today ranks as the world's leading provider of UNIX solutions and has led for the last 10 quarters on a rolling four-quarter average of revenue. Last year, IBM gained revenue share again and maintained UNIX leadership with a 33.8 percent share and finished 3.1 points ahead of number 2 Sun and 7.7 points ahead of number 3 HP. In fact, IBM is the only major UNIX vendor to gain cumulative revenue share in the past five years (+11.3 points) while both Sun (-1.7 points) and HP (-4 points) lost share between 2003 and 2007. IDC forecasts this market will continue to grow, with combined UNIX and Linux server spending to increase $1.2 billion between 2007 and 2011, to a total opportunity of $27.4 billion in 2011, 45 percent of all projected customer spend. New Enterprise UNIX Server The new 64-core, 128-thread Power 595 now ranks as the world's fastest UNIX system. Using the latest 5.0 GHz POWER6 processor chips with dual memory controllers, and leveraging a new, sophisticated symmetric multi-processor (SMP) point-to-point interconnect to communicate between its cores, the Power 595 bested the results of all competitors for running large two-tier environments running the SAP® ERP application. In fact, two-tier SAP Sales and Distribution (SD) Standard Application Benchmark results showed a 32 processor/64-core/128 thread Power 595 can handle more than twice the number of users per core of a 64 processor/128-core/256 thread Itanium-based HP Superdome system. The Power 595 SMP point-to-point interconnect starts with 8-core nodes that are built from four dual-core POWER6 chips tightly integrated into one module with direct interconnects between all four chips in the node. Then these 8-core nodes are connected into a superlinear-scaling fashion meaning each time a node is added it is connected point-to-point to all previous nodes, so that together there are actually 28 interconnects between those eight nodes. This provides massive amounts of bandwidth to gain the maximum exploitation of the total system processor, memory and cache capability. The Power 595 supports up to 4 TB of memory per server, twice as much as the HP Superdome and Sun SPARC. Continuing the IBM tradition of innovation with the Power Architecture systems design, the Power 595 also supports four memory operations per cycle and an aggregate memory bandwidth of more than 1.3 TB/sec (terabytes per second), which is enough to transfer in each second the amount of information printed on the paper made from 50,000 trees. With clients purchasing more and more servers, the advanced capabilities of the Power 595 are designed to help simplify the infrastructure and save enterprise data center costs through server consolidation, easier systems management and energy savings. For example, POWER6 EnergyScale™ technology, working in concert with IBM Systems Director Active Energy Manager™, supports all Power Systems servers. It provides the capabilities for better facility planning, energy and cost savings, and peak energy usage control, and can increase energy efficiency for Power Systems users byup to 25 percent. Unparalleled Virtualization for New Enterprise Data Center Featuring up to 254 virtualized partitions, the Power 595 offers leadership virtualization technology for large-scale consolidation with optional PowerVM technology. IBM estimates more than 90 percent of Power Systems enterprise servers currently use PowerVM technology to more effectively manage their IT costs. PowerVM Enterprise Edition offers Live Partition Mobility on the Power 595, allowing an entire AIX or Linux partition to be moved, while running, to another POWER6 processor-based system, allowing the reduction or elimination of planned downtime and increasing application availability. Live Partition Mobility is an exclusive of IBM POWER6 UNIX and Linux. HP and Sun do not have the same feature for their SPARC or Itanium technology-based systems. Filling out the Power Systems lineup, IBM recently introduced the Power 520 Express and Power 550 Express – i Editions for the SMB market. The new Power 570 is a unified version – with common firmware, pricing, and a single set of feature codes - combining the already in-market POWER6-based System p 570 and the System i 570. The new Power 570 runs any permutation and combination of i, AIX or Linux partitions offering the ultimate in flexibility and increased asset utilization and reuse. And with PowerVM, Power servers also run many Linux x86 applications. Power Rewards Program Similar to a frequent flyer incentive, this new program offers reward points to competitively installed customers based on the number of HP or Sun cores retired or traded-in when migrating to IBM Power Systems. Customers can redeem points toward no-charge migration services to move from HP-UX or Sun Solaris to AIX or Linux operating environments. IBM is offering a very aggressive 1,000 points per core for Sun UltraSPARC and SPARC-based systems, HP Alpha and Itanium technology-based systems, and SGI MIPS trade ins. Since HP will no longer guarantee they will sell PA-RISC-based HP Superdome systems after the end of the year, IBM is giving those customers a highly attractive alternative to HP’s multi-year plea to migrate to Itanium technology-based HP Superdome. IBM is offering quadruple the Power Rewards points for PA-RISC-based system trade-ins -- or 4,000 per core, redeemable for up to $4,000 worth of no-charge IBM migration services --- to help those customers easily justify the migration to IBM. A wide range of additional discounts on hardware, software or services are available and a reward points table is published for accumulating and redeeming Power Rewards. IBM will also re-use or recycle competitive HP or Sun servers in an eco-responsible manner. IBM Global Technology Services offers a full complement of asset-based, standardized services for Power Systems, ranging from implementation to availability, virtualization and support, along with energy efficiency and security assessments, which allow clients to maximize their investment in IBM Power servers and software. Clients can also take advantage of PowerCare Services -- with the purchase of a Power 595 server, clients are eligible to select one of five PowerCare services options, free of charge. Power Systems Software IBM also introduced a new family of high availability solutions, called PowerHA, designed to help customers maximize system availability and performance for AIX, i and Linux operating systems through disk clustering, logical replication and other capabilities. For better alignment within the Power Systems Software portfolio, IBM High Availability Cluster Management Program for AIX and Linux will become PowerHA for AIX and PowerHA for Linux and the IBM High Availability Solutions Manager for i5/OS will become Power HAfor i. As announced last week at the COMMON User Group Conference, the new Power Systems platform continues the decades long value of application compatibility for System i clients. Now, i clients can run their traditional applications unchanged alongside their new Web-based applications, on everything from blades to scalable servers based on the industry's fastest POWER6 processors. Availability The Power 595 supports AIX, the IBM UNIX operating system. Support for both IBM i and Linux is planned for the second half of 2008. IBM is offering attractively-priced upgrade options to allow clients to leverage their current investments in POWER5 processor-based 590 and 595 systems. The Power 595 will be generally available on May 6. About IBM For more information about IBM, please visit its Web site.