Passport Advantage Entitlement Slope Change

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

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Discussion Points Why are the Passport Advantage
Entitled Discounts Changing?

• Improved functionality, security, stability, and
  new product releases have been provided across
  IBMs 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 Microsofts SQL Server,
  and Oracles 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 enterprises
  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.

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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

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Portfolio Product Improvements

• IBM continues to deliver product improvements
  across the entire portfolio.