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«Year Pages 2000 2-9 2001 10-19 2002 19-31 2003 31-39 2004 39-52 2005 52-61 February 2006 1406HHX Business Performance IBM revenue climbs to $85.09 ...»

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IBM is selected by a partnership of U.S. public safety and transportation agencies in Virginia, Maryland and the District of Columbia to build the Capital Wireless Integrated Network, the first operable wireless system to span multi-state government jurisdictions -- which will allow officials from more than 40 local, state and federal agencies to communicate with each other in real time...... The company says in October that will soon open the IBM Government Solutions Center, a computer science laboratory just outside Washington D.C. (in Vienna, Va..), to bring together IBM experts and public sector customers in a facility to research, validate and develop technology solutions for such initiatives as e-government, e-democracy and homeland security.

Nestlé, the world’s largest food and beverage enterprise, selects IBM as the exclusive provider of servers, storage systems and database software for the next five years for the GLOBE data centers at the heart of Nestlé’s worldwide business transformation initiative...... Amtrak and IBM complete an agreement aimed at boosting the carrier’s IT systems while cutting costs $85 million over a seven-year period...... IBM launches a new disaster recovery service to help customers better safeguard their networks, provide faster and more secure back-up systems for their data and ensure near uninterrupted access to critical business information.

One year after announcing its Project eLiza initiative to develop self-managing or “autonomic” systems, IBM demonstrates new technology that can save an estimated 20 percent on customer information technology budgets. The new technology includes Enterprise Workload Manager, ITS Electronic Service Agent, Enterprise Identity Mapping and “Raquarium.” Eight U.S. major league baseball teams use IBM’s PROS, a Web-based software application which allows scouts to quickly collect, store and access information on prospects and players.

1406HHX IBM provides enhanced voice recognition technology for a revolutionary new navigation system for select models of the 2003 Honda Accord.

Alliances Hitachi, Ltd. and IBM announce plans in April to form a strategic alliance to accelerate the delivery of advanced storage technologies and products to market. Under the terms of the preliminary agreement, the two companies plan a multi-year alliance to research and develop new open standards-based technologies for future storage networks, systems and solutions.

Hitachi and IBM say they intend to combine various hard disk drive (HDD) operations into a new standalone, joint venture company, integrating their R&D and manufacturing operations, as well as related sales and marketing teams. Two months later, the two companies announce a definitive agreement to transfer their HDD operations to a new company under majority Hitachi ownership.

Hitachi agrees to purchase the majority of IBM’s HDD-related assets for $2.05 billion. Hitachi will initially own 70 percent of the new company -- Hitachi Global Storage Technologies -- and will make a series of fixed payments to IBM before assuming full ownership after three years.

IBM and Red Hat announce a multiyear alliance, including services and expanded support for software and servers, that will enable the two companies to provide broad Linux support to enterprise customers around the world.

IBM invests in Aprion Digital, a supplier of state-of-the-art digital ink jet printing technology.

In a unique collaboration, IBM, Sony Corporation, Sony Computer Entertainment Inc. and Toshiba Corporation sign a multi-year agreement to jointly develop semiconductor technologies based on silicon-on-insulator and other IBM materials advances. This will lead to the development of high-performance, low-power chips necessary for a wide range of future electronic products -- from digital consumer applications to supercomputers.

Nextel Communications, Inc. and IBM form an alliance covering the development, marketing and deployment of mobile e-business solutions to enterprise customers in the United States, as well as an eight-year, $1.2 billion outsourcing initiative to manage and enhance Nextel’s customer care capabilities.

Nokia and IBM join forces in April in the public wireless LAN business. Three months later, the two companies announce an agreement on digital content delivery for mobile applications and services.

IBM and Accelrys, Inc. -- one of the largest software vendors in life sciences -- form an alliance to enhance drug research and development.

IBM and VMware, Inc. are developing tools using dynamic logical partitioning to consolidate more than 20 “virtual servers” on a single IBM eServer.

1406HHX IBM and Great Wall Technology Limited sign a three-year agreement in which Great Wall Technology’s subsidiary -- ExcelStor Technology -- will manufacture the 40 gigabyte version of IBM’s Deskstar 120GXP desktop drive. The agreement makes Great Wall Technology the first Chinese company to manufacture and sell computer hard disk drives for the worldwide market.

American Express and IBM form a technology services partnership in February in which IBM will provide utility-like access to its vast computing resources. The agreement is valued at more than $4 billion over seven years. The following month, the two companies agree to jointly develop a Web-based expense report and reconciliation tool designed to reduce the cost of managing everyday business expenses.

IBM and Xilinx announce in March a two-year, multi-million dollar agreement under which IBM will manufacture the newly-announced Xilinx Virtex-II Pro semiconductor products. The two companies sign an agreement in June under which IBM will license field programmable gate array technology from Xilinx for integration into IBM’s Cu-08 ASIC product offering.

IBM and Dassault Systemes sign an agreement with Toyota Motor Corporation to build a worldclass collaboration around PLM Solutions covering vehicle development processes.

IBM and The Thomson Corporation agree to combine IBM’s e-learning technologies and Thomson’s learning products and services to jointly pursue the $18 billion global market for corporate and government e-learning.

Air Canada begins using new wireless mobile IBM self-service kiosks in a trial program to expedite passenger check-in at Toronto’s Lester B. Pearson Airport. The mobile kiosks represent the first jointly developed solution resulting from the strategic relationship between IBM and Air Canada.

IBM and Mayo Clinic say they will jointly develop an information system to give Mayo Clinic investigators information to help them more quickly identify potential clinical trial participants.

Science & Technology For the tenth consecutive year, IBM leads the world in generating the most U.S. patents -- with 3,288 -- nearly doubling the output of the second most productive company. In the past decade, IBM inventors have received a record 22,357 patents, besting the next closest company, Canon, by nearly 7,000 patents. During this period, IBM has generated more patents than 10 of the largest U.S. information technology companies combined, including HewlettPackard/Compaq, Intel, Sun, Microsoft, Dell, Apple, EMC, Oracle, and EDS. In addition, IBM is the only company to be granted 3,000 U.S. patents in a single year, passing that milestone each of the past two years.

1406HHX IBM has more systems than any vendor on a list of the world’s most powerful supercomputers, nearly doubling the number of machines posted by the second place company, the combined Hewlett-Packard/Compaq.

The company creates the world’s fastest silicon-based transistor, achieving speeds of 350 GigaHertz. The new transistor performs nearly 300 percent faster than production devices and 65 percent faster than previously reported silicon transistors.

IBM scientists build the world’s smallest working silicon transistor. At six nanometers in length, the new transistor is at least 10 times smaller than the state-of-the-art production transistors.

IBM researchers create the highest performing nanotube transistors to date and prove that carbon nanotubes -- tube-shaped molecules made of carbon atoms that are 50,000 times thinner than a human hair -- can outperform the leading silicon transistor prototypes available.

Using an innovative nanotechnology, IBM scientists in Switzerland demonstrate a data storage density of a trillion bits per square inch -- 20 times higher than the densest magnetic storage available. IBM achieves this density -- enough to store 25 million printed textbook pages on a surface the size of a postage stamp -- in a research project called “Millipede.” IBM records 1 terabyte (TB) of data to a linear digital tape cartridge, storing 10 times more data than any linear tape cartridge then available. (One terabyte is equal to 16 days of continuously running DVD movies or 8,000 times more data than a human brain retains in a lifetime.) The 1 TB initiative had been under development since April 2001 at IBM’s Almaden Research Center in San Jose, Calif., and IBM storage product development laboratories in San Jose, Calif.;

Tucson, Ariz., and Yamato, Japan. (This achievement coincides with IBM’s 50th anniversary of magnetic tape storage that ushered in a new era of information processing. In May 1952, IBM introduced the Model 726 tape drive [see http://wwwibm.com/ibm/history/exhibits/701/701_1415bx26.html] which stored a total of 1.4 megabytes equal to one floppy disk in 2002 -- on a movie reel over 12 inches in diameter and using a special tape media developed by 3M.) Company researchers build and operate the world’s smallest working computer circuits using an innovative new approach in which individual molecules move across an atomic surface like toppling dominoes. The new “molecule cascade” technique enables IBM scientists to make working digital-logic elements some 260,000 times smaller than those used in most advanced semiconductor chips.

IBM announces a research collaboration that will help NASA scientists analyze tele-robotic data during the 2003 Mars Exploration Rover expeditions.

IBM researchers demonstrate the industry’s first self-diagnostic tool that can automatically monitor 802.11 wireless networks and report security problems in real-time.

1406HHX The company begins a research program to develop technologies that could help solve continually escalating power consumption issues and help reduce cooling and power supply costs for IT infrastructures.

Researchers from IBM and Nion Co. develop innovative technology to peer deep inside materials and view atoms interacting in different environments at a resolution never before possible.

IBM develops and demonstrates a tiny device that measures heart rate and is able to sense when the person wearing it is in distress and then call a cell phone for immediate help.

Facilities IBM opens a 300 millimeter semiconductor facility in East Fishkill, N.Y. The new 140,000 square foot facility -- designed to satisfy growing demand for IBM’ s leading-edge chip technologies through high-end “foundry” manufacturing services -- contains 200 miles of piping and tubing, 600 miles of cable and wiring and two million pounds of ductwork.

IBM and Sanmina-SCI Corporation, a global electronics manufacturing service provider, agree in January that IBM will outsource a significant portion of its desktop personal computer manufacturing needs to Sanmina-SCI and that Sanmina-SCI will acquire IBM’s NetVista desktop manufacturing operations in the United States and Europe. IBM, which will continue to design and market the NetVista line of desktops, signs a three-year, $5 billion outsourcing agreement with Sanmina-SCI for desktop manufacturing services. Under the agreement, Sanmina-SCI will acquire and use existing IBM desktop manufacturing buildings and equipment in Research Triangle Park, N.C., for U.S. and Canadian customers, and assume the management of IBM’s current outsourced manufacturing contract, and acquire IBM manufacturing equipment, in Greenock, Scotland, for European and other customers.

The IBM Silicon Valley Laboratory in San Jose, Calif., marks its 25th anniversary in September and the unveiling of Silicon Valley’s first IBM Design Center for e-business infrastructure (a 3,000 square foot, $2 million state-of-the-art facility in which IBM technical experts host workshops for customers and collaborate with them to design and develop new e-business solutions). Opened in 1977 on 90 acres, the Silicon Valley Laboratory was the first software development facility of its kind. Its track record of achievements include IMS, the workhorse database technology; the relational database; DiscoveryLink; 1,000 patents; and creation of IBM’s content management technology.

IBM says in May that it is realigning its Microelectronics Division to increase operational efficiencies and capitalize on emerging growth opportunities. As part of this realignment, the division will increase its use of leading-edge copper technology and close older aluminum technology capacity.

IBM establishes the Development Center for Telecom and e-business -- in San Mateo, Calif., Sydney, Australia and Hursley, U.K. -- to assist independent software vendors in creating ebusiness applications that can connect easily to telephone networks.

1406HHX Corporate Citizenship IBM is ranked Top Corporate Citizen of the year by Business Ethics Corporate Responsibility Report. The publication’s annual listing of the 100 Best Corporate Citizens is based on a quantitative measure of 650 public companies’ corporate service to seven stakeholder groups.

IBM announces a $15 million grant program designed to drive higher-quality training for U.S.

public school teachers. The announcement brings IBM’s investment in its global Reinventing Education initiative -- serving 65,000 teachers and six million students -- to $70 million. The company also rolls out the IBM Scholars Program, a comprehensive offering to give participants in higher education free software, discounts on course materials and information on IBM’s university-related initiatives.

Business Performance IBM revenue reaches $89.1 billion, a gain of 10 percent over 2002, and net income of $7.6 billion is 112 percent higher than the year before. There are some 316,500 employees and 671,610 stockholders at year end.

Organization IBM completes its acquisition of Rational Software Corp. as the fifth brand of the IBM Software Group.

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