IBM Growth in Emerging Markets Fuels Lotus Momentum

ARMONK, NY, Jul 31 (MARKET WIRE) --
Led by strong sales of IBM (NYSE: IBM) Lotus Notes and Domino 8 in the
second quarter of 2008, IBM's Lotus software business outgrew Microsoft
by winning millions of customer seats worldwide in direct competition
with Microsoft, aided by key wins over its Redmond-based rival in
emerging markets.

IBM's emerging markets represented 18 percent of IBM's overall geographic
revenue in the second quarter of 2008, and together grew 21 percent as
reported. In addition, the Brazil, Russia, India and China subset grew 31
percent in the second quarter, led by strong growth in India.

Among those customer wins was Lotus' largest Asian customer engagement to
date -- a major bank licensing 300,000 Lotus Notes seats as well as Lotus
Symphony, IBM's free personal productivity software based on the the
OpenDocument Format. Lotus Symphony has been downloaded by over 1.3
million individuals and businesses, including scores of Microsoft Office
customers. Customers that chose Lotus Notes and Domino over Microsoft in
key markets included Max New York Life, Reliance Industries, Vedanta, and
Aviva in India; GD Development Bank, Johnson Electric, HKG Environ
Protect, CED, DL Cosco Shipyard in China; Affin Bank and Trakando in
Singapore; and Russian Railways in Russia.

"Enterprise customers -- especially many rapidly-growing businesses in
emerging global markets -- are choosing Lotus software for its open,
flexible design," said Bob Picciano general manager, Lotus Software.
"These companies prefer open standards over the restrictions of legacy
proprietary technology for their long-term collaboration investments."

The second quarter saw the largest historical client win for Lotus in
North America as well. A member of the so-called "big six"
accounting/consulting firms purchased more than 150,000 seats of the
entire Lotus portfolio, selecting Lotus Notes, Lotus Sametime, Lotus
Connections, IBM Lotus Quickr and WebSphere Portal over Microsoft
Exchange and SharePoint, among other products. Other large companies that
chose Lotus Notes and other Lotus software over Microsoft products
included several leading banks in the U.S., the United Kingdom and
Germany, as well as the Australian government.

Other clients who have recently invested in Lotus Notes and other Lotus
software over the competition include consumer goods giant
Colgate-Palmolive, chemical manufacturer Ineos of Belgium, the U.S.
Federal Aviation Administration, NutraFlo, Dutch Railways, Rohm Haas,
Imerys and the Salvation Army. Specifically moving to Lotus Notes 8 were
CFE Compagnie d'Enterprises of France, Virginia Commonweath University,
Winsol International, The U.S. General Services Administration, the U.S.
Internal Revenue Service, Standard Insurance, New York Life, Kentucky
Baptist Convention, Verizon, Publishers Printing, Hyatt Hotels, Union
Pacific and Nationwide Insurance.

Many clients of all sizes are questioning their investments in legacy
Microsoft software products. Migrating to new versions of Microsoft
Exchange has proven to be a daunting and expensive task. Ferris Research
recently published a report (Exchange 2007 Implementation Issues, December
2007) that indicated 70% of Microsoft customers felt that migrating to
Exchange 2007 was either "Difficult or Very Difficult."

Large companies are concerned with the prospect of upgrading to
Microsoft's Vista operating system and continued high percentage of IT
costs devoted to personal computers amid challenging economic conditions.
Meanwhile, more strategic IT investments that could spur top-line revenue
growth go unfunded and unrealized.

Increasingly, both public and private sector companies are looking at open
alternatives such as IBM Lotus Symphony and other solutions from
OpenOffice.org. One such organization that is making the switch to Lotus
Symphony is the Anglican Church of Australia, which stated publicly that
it will save an estimated AU$150,000 a year.

Industry analysts credit Lotus with a more innovative, open portfolio that
gives businesses freedom of choice, lower IT costs, and more insightful
employee tools. For example, the industry's first enterprise social
networking product, IBM Lotus Connections, doubled its client base this
year after debuting as the fastest growing new IBM software product in
2007. At the recent Enterprise 2.0 conference in Boston, attendees
witnessed a demonstration comparison pitting IBM Lotus Connections against
Microsoft SharePoint. Moderator Mike Gotta of the Burton Group summed up
the audience's reaction in his blog, "Collaborative Thinking." He wrote,
"IBM was the clear winner across the board. Maybe Microsoft underestimated
IBM. And in some cases, decision-makers are more open to at least
considering alternate solutions they might not have even entertained
before (which would be good news for IBM and Jive in particular)."

IBM Lotus Sametime, IBM's platform for unified communications and
collaboration, vaulted to over 100 million individual licensed seats in
the second quarter with one-third of sales going to Microsoft customers.
IBM WebSphere Portal software with Web 2.0 technology has won marketshare
leadership for seven consecutive years by leading research firms, Gartner
and IDC (see separate release today). Lotus has also launched new
products in the software mashup, computer appliance, and
software-as-a-service categories.

With 15 consecutive quarters of revenue growth, IBM's flagship Lotus Notes
and Domino products has been transformed into a versatile tool that
consolidates the individual's work world onto one screen, employs Web 2.0
technologies and reduces time spent on email. Lotus Notes and Domino
adoption has grown to more than 140 million licenses with gains across
small-medium business, more than half of the largest 100 corporations in
the world, 80 percent of the top 10 global companies in banking,
telecommunications, aerospace and defense, consumer products, electronics,
insurance, and pharmaceuticals.

For more information, please visit: www.ibm.com/lotus/notesdomino

Contact:
Mike Azzi
914-766-1561
azzi@us.ibm.com

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