October 8, 2003

IBM Helps the UK and Russian Governments Adopt Linux

The United Kingdom and Russia today become the latest governments to embrace Linux and open standards, joining more than 20 U.S. states and 175
governments around the world.

In two separate deals illustrating the unprecedented adoption of Linux by governments, IBM today is announcing that it is working with the UK and Russia
on Linux projects that will further establish Linux in the public sector.

First, the Office of Government Commerce (OGC) in the United Kingdom--formerly a Windows fixture for years--will announce that federal, state and local
government agencies can make the move to Linux and an open computing model in order to cut costs and increase efficiencies instead of being locked into a
single, proprietary "monoculture" environment. IBM is working closely with the UK government on 9 projects to help develop innovative IT solutions that
include key IBM hardware, software and services solutions running on Linux.

Next, IBM is announcing that it is working with the Russian government to establish a Linux Competency Center in Moscow. The new center, sponsored by
IBM, the Russian government and universities there, is designed to provide a hands-on environment to drive application and solution development, offer
support, consulting, education and provide Linux product and solution certification.

This move by the UK and Russian governments is the latest in a long line of agencies around the world that have looked to Linux, open standards and IBM
to help cut costs and increase reliability across diverse IT environments.

Last week, Massachusetts announced it would lead with open source and open standards based software in procurement decisions. In the US, the
Massachusetts announcement is the broadest. Other states are incorporating Linux into their infrastructure in a variety of ways.

Below, please see the press releases from the UK's Office of Government Commerce and Russia.

Please contact me at 212-871-4077 to speak with an IBM executive who can take you through the state of Linux adoption by state and local governments here
in the US, as well as governments around the word.

GOVERNMENT INVESTIGATES WIDER USE OF OPEN SOURCE IT SYSTEMS ACROSS PUBLIC SECTOR

The Government has announced its latest development to promote wider competition in the public sector IT market by launching a series of Open Source
Software (OSS) trials across both central government departments and the wider public sector.

Nine 'proof of concept' pilots are being coordinated by the Office of Government Commerce (OGC) and the Office of the eEnvoy (OeE). They build upon the
joint OGC/OeE strategy on the use of OSS across the public sector and aim towards the implementation of OSS as an alternative to proprietary software.

These initial trials are being run by IBM and will measure the effectiveness and cost-benefits of IT systems based on OSS products, when compared against
proprietary software solutions. They may lead to further pilot-studies with a limited range of selected suppliers to validate the emerging findings.

Departments taking part in the trials are: -
Office of the Deputy Prime Minister
Office of the eEnvoy
Powys Borough Council
Newham Borough Council

OGC Chief Executive, Peter Gershon, welcomed this development saying:

"This builds upon our commitment to create a level playing field between OSS from a range of suppliers and propriety software within Government
procurement. The trials will operate in a controlled environment and will enable us to identify when and how-best to use the technology to the benefit of
departments and the taxpayer alike."

Larry Hirst, General Manager of IBM UK stated:

"Customers around the world are already benefiting from open systems and an open approach to computing. In today's diverse IT environments, especially
those in the Government space, open source software like Linux can help lower dependency on a single software provider. This can help reduce overall
costs and increase the flexibility and reliability across an infrastructure."

The Office of the e-Envoy has a published policy on the use of Open Source Software. This approach fits that policy, which encourages proper
consideration of Open Source Software with other proprietary brands.

Andrew Pinder, the Government's e-Envoy said of the pilots:

"Our Open Source policy acknowledges the competitive viability of OSS solutions and these pilot-studies should provide a good opportunity to demonstrate
this. UK Government is keen to explore the potential for OSS solutions to achieve cost-savings and an increased flexibility in the development,
enhancement and integration of our IT systems. "

At the same time OGC announced its latest deal on pricing arrangements for Software with IBM. This will offer enhanced discounts across the public sector
with additional savings where Linux products are specified.

NOTES TO EDITORS
The publication of the Government's Open Source Software (OSS) Policy was announced in Parliament on the 22nd July 2002 by Cabinet Office Minister,
Douglas Alexander MP, in response to a question by Geraint Davies MP (Croydon Central). The Policy clearly set out a level playing field for procuring
OSS and proprietary solutions based on value-for-money considerations.

The Government's Open Source Software Policy is available at
http://www.e-envoy.gov.uk/oee/OeE.nsf/sections/frameworks-oss-policy/$file/oss-policy.htm#policy

OGC Procurement Guidelines are viewable at
http://www.ogc.gov.uk/index.asp?id=2190&

To view earlier OGC IT related Press Releases click on links below:
http://www.ogc.gov.uk/application.asp?app=press_release.asp&process=full_record&id=56http://www.ogc.gov.uk/application.asp?app=press_release.asp&process=full_record&id=1000005

Established in April 2000, the OGC was set up to act as a catalyst in procurement issues and to work with civil departments to achieve best value for
money in their commercial activities. Responsible for civil central government procurement policy and Best Practice including Construction, Property
Management, IT, Supplier Relations including opening up government contracts to SMEs, e-commerce including the Government Procurement Card, the Gateway
Review Process, OGCbuying.solutions, including the development of Government buying catalogues such as G-Cat, L-CAT and S-Cat and developing strategic
procurement partnerships with the private sector.

IBM and Russian Ministry to Promote Linux Adoption

IBM and Russian Ministry of Communications and Computerization to open Linux Competency Center to promote the adoption of Linux in Russia

Moscow, Russia, October 8th, 2003 -- Today, IBM and the Russian Ministry of Communications and Computerization agreed to launch a new Linux Competency
Center in Moscow, Russia. The new center will be set up to help customers of every size from industry, academia and government to take full advantage of
the reliability, flexibility and total cost of ownership that Linux provides. Additionally, a top university in Russia, the Moscow Technical University
of Communications (MTUCI) has committed to contributing open source skills and technical solutions to the center.

The Linux Competency Center is designed to provide a hands-on environment to simulate real world scenarios, drive application and solution development,
offer support, consulting, education and provide Linux product and solution certification.

IBM resources available in the Moscow Linux Center of Competency will include a variety of IBM TotalStorage products running Linux; including eServer
xSeries systems, high-powered Linux clusters, as well as, IBM software including WebSphere, DB2, Lotus, Tivoli and Rational offerings that deliver
integration, database, collaboration and security capabilities. IBM will also assign skilled Linux specialists to the center, as well as, link the Moscow
center with Linux Competency Centers around the world.

"We believe this new center created jointly with the Russian Ministry will rapidly facilitate development of new Linux based solutions for governments,
academia and commercial customers in Russia. The center will also offer Russian technology vendors a key opportunity to play a significant role in the
world wide Linux community," said Val Rahmani, Vice President IBM Corporate Strategy.

"IT solutions based on Linux and open standards will open up great opportunities to businesses in Russia. In particular this center will help create a
Linux ecosystem enabling Russian hi-tech companies to expand into global markets faster", said Andrey Korotkov, Deputy Minister from Russian Ministry of
Communications and Computerization.

The center is also open to Linux distributors and IBM Business Partners to evaluate and test key applications on Linux.

With the opening of this center, IBM and the Russian Ministry underscore their commitment to new information technologies and open standards.

About IBM

IBM is the world's number one server company and information technology provider, with 80 years of leadership in helping businesses innovate. IBM helps
customers, business partners and developers in a wide range of industries that leverage the power of the Internet for e-business. For more information,
visit: www.ibm.com.

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About the Russian Ministry of Communications and Computerization
The Russian Federation Ministry for Communications and Computerization (Minsvyazi of Russia) is a federal executive power structure which implements the
state policy and management in the communications (tele and postal) and informatization areas, and the related coordination of other federal executive
power structures. The basic challenges of the Russian Federation Ministry for Communications and Informatization are: development and implementation of
the state policy in the telecommunication, postal communication and informatization areas.

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