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Passport Advantage Entitlement Slope Change

Passport Advantage Entitlement Slope Change. WW Business Partner Communication. September 9, 2005. Price Action Overview. Passport Advantage Entitled Discounts. Structural Change Highlights : Effective Tuesday, October 11, 2005. Formal Channel Announcement is September 13, 2005.

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Passport Advantage Entitlement Slope Change

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  1. Passport Advantage Entitlement Slope Change WW Business Partner Communication September 9, 2005 IBM Confidential

  2. Price Action Overview Passport Advantage Entitled Discounts Structural Change Highlights: • Effective Tuesday, October 11, 2005. • Formal Channel Announcement is September 13, 2005. • This price action, in general, affects most products. Several products, however, will not experience an entitled price change. • No other passport program modifications have been made. • Effective September 13, new products will be priced using the new slope. • Effective October 11, existing products will be priced using the new slope. Business Partner Opportunity: • Business partners will improve their margin by continuing to sell on value. IBM Confidential

  3. Discussion Points: Why are the Passport Advantage Entitled Discounts Changing? • Improved functionality, security, stability, and new product releases have been provided across IBM’s entire software portfolio (see “Portfolio Product Improvements” chart). • Service support and development costs continue to increase, on average ~5% per year. • The entitled increases are consistent with competition and IBM prices remain very comparable. • Major competitors have recently raised prices, such as a 25% increase in Microsoft’s SQL Server, and Oracle’s 4% annual increase embedded in maintenance agreements. • Improvements have been made to Passport Advantage Online for customers: • Allocate Entitlement tool available to eligible customers to help manage their enterprise’s central software purchasing with distributed deployment strategy. • Improved software download capabilities: primary and back-up contact can pull a report of who is ordering media and how many times they are downloading the software. • Media ordering from the Internet. • Implemented a multi-year maintenance agreement. • Improved the entitlement process and linkages of changed products for asset management. • New pricing flexibility has been announced (sub-capacity, dual core x86, entry pricing), offering better price performance to customers. • No SRP/List Price changes are occurring. • Cost of acquiring new versions is still less expensive than the new license. IBM Confidential

  4. Concluding Comments • Key Opportunity: This announcement can be used to motivate the remaining 3rd quarter business prospects to purchase before the pending price increase. • Additional information is available: • FAQ document • A list of recent product improvements for each software brand IBM Confidential

  5. Portfolio Product Improvements IBM continues to deliver product improvements across the entire portfolio. IBM Confidential

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