IBM Partnering Strategy & Overview Sal Causi, P. Eng. IBM Life Sciences This presentation can be modified for any external and internal needs. It is geared for the VC community in the first calls we make on them to develop relationships and introduce the Venture Capital Relations value team under Gerry Mooney AND the NetGen value team under Jim Corgel. It is also for internal education on what we are doing in this space. Sometimes it is best delivered verbally once you have gone through it several times and possibly leaving a copy behind. Other times it can be a discussion document in front of VCs, Incubators, Web Integrators, Angels, and others who are influencers in the startup communities we serve and want to know what IBM is doing in this space.

NetGen VC / Incubator Mission Develop strategic relationships with targeted VC and Incubator firms and portfolio companies resulting in: Preference for IBM solutions and platforms Acquisition of new IBM clients New channel and business relationships Identification of new technologies of interest to IBM Significant revenue growth Increased IBM "mindshare" and marketshare So we Don't Miss the new Markets [again] SVC co's traditionally more successful, reducing our risk of - wasting time on companies that will go bankrupt - default on IGF financing Technology Headlights: - Gain early access to technologies of interest to EBOs For 2001 - Revenue growth needs to stay high, at least 200% - GEO leaders are working to globalize best of breed processes, templates, documents, etc. to maximize sales time and leverage

How IBM Selects a VC or Incubator Alignment with IBM Objectives Depth of Experience and Credibility Business Innovation Enabling Skills Track Record of High Potential Companies Relationships & Mind Share IBM is focusing its Growth, R&D and Solution Building across several fronts... these are the "Corporate" Emerging Business Opportunities (EBOs) AND the NetGen Segments.

What IBM Brings to the Table... Global Technology Innovation Best of Breed IP I/T Solutions Sector Expertise Opportunity for Business Alliances Services Marketing Technology Ultimately, to Speed Success and Profits VC's (and others) provide key business skills. They can focus on key markets, picking the winners from a business model and management team perspective, do detailed due diligence and financing analysis, and bring a network of contacts to startups... all of which is valuable. IBM is a technology innovator that brings value with our focus on industries and customers, solution building teams, IGS, sales and marketing to customers the startups want access to, our business partner programs, and our best in breed technology. Bringing the two values together is how new economy "technology based" companies can grow profitably thereby making them and the VCs (and others) successful.

There Is Opportunity in Cooperation Companies with prominent investment banks and venture capitalists backing them are no longer surefire successes. Corporate sponsorship has almost become a prerequisite for startups to reach public markets. Red Herring 12/19/00 There Is Opportunity in Cooperation Today there is no such thing as surefire success for young companies, even if you have promising technology, brilliant management and solid backing from prominent investment banks and venture capitalists. Winning requires an approach built on cooperation. In today's business environment, corporate sponsorship has become a prerequisite for startups who aim to reach public markets.

"Maximizing" for Mutual Benefit For the VC / Incubator and their Companies Fast Path Access to: World Class IP Expertise: Sector / Services / Channels IBM's Global "Eco-Net" of Partners Credibility of Portfolio Company Offerings Visibility of Technologies "into" IBM Lower Total Cost of Ownership for Shortened Path to Profitability Bottom Line.....Increasing Economic Value of Investments For IBM Fast Path and Early Access to: High Potential Early-Life Companies Insight into Emerging Markets & Technologies Opportunities to Fill Offering "White Spaces" Development of New Partnerships / Channels / Alliances Market Visibility & Mind Share Bottom Line..........Revenue...Near / Mid / Long Term

Coverage Model Life Sciences Business Development Executives Geographical representation Local representatives: Client Manager Partner Channels Partnerworld program

VC Relationship Management Partner/Alliance Development Global Financing Corp. Dev. Server/Storage Group Software IBM Global Services Technology IBM Research VC Relations EBOs IBM Strategy VC Firm Relationship Manager Developer Relations IBM Industry Solution Units VC Firm Portfolio Company

We Play from Business Concept to Maturity Angel/ Garage Mezzanine Round Public Maturity Concept Pre-IPO Post-IPO First Round VC Initial Business & Technology Decisions Expansion and deployment

Developer Relations: Strategic Alliances IBM will go to market with selected application software firms to jointly deliver e-business solutions for customers ISV selection criteria: Industry leadership in function, quality and customer satisfaction Strategic fit with IBM industry, solution or brand priority investment areas Commitment to open standards and IBM platforms, technologies, and IBM e-business framework

Startup Initiative for Developers Relationship Building Relationship and Technology Managers that know Startups Guidance on First and Next Steps with IBM Marketing Services Global Solutions Directory Incubator Series ASP Prime Hosting Advantage IBM Global Services Financial Incentives SuccessLease QuickLaunch Technical Assistance Guidance on IBM e-business Software and Hardware Developer Toolbox Value Packages Linux Community Development System developerWorks alphaWorks 16 Solution Partnership Centers Success Stories 350 new Relationships 33 new Advanced Partners 4 new Strategic Alliances

Seizing the Opportunity Extensions Web Hosting Network Processors PC Servers Web Servers DB/Content Management Strategic Opportunities Pervasive Computing B2B Collaborative Commerce Linux Life Sciences Storage Networking Network Processing Server Appliances Core Offerings Building on IBM Core Strengths Services Personal Systems Software Technology Servers Financing Storage Seizing the Opportunity -- Building on IBM Core Strengths Core Offerings, Extensions, Strategic Opportunities From strategy and development to integration and implementation, IBM has the end-to-end capability to build the infrastructure for next-generation Internet markets. Our core offerings enable the creation of robust, scalable and flexible foundations for e-business that, when combined with our highly focused enhancements, can be tailored to the requirements of these new markets. The operations of thousands of companies worldwide already are powered on IBM technological backbones. IBM has the world-class portfolio of products and services that can serve a springboard for launching these new strategic markets as well as provide the technological building blocks for their growth. Let’s review in detail each of these emerging markets.

IBM IP Largest Patent Portfolio in the World 3th Largest Life Sciences IP Portfolio Technology Licensing Mining of IBM's Technology Asset Portfolio Patents Licensing Protection from 3rd party infringement actions Strengthening through interlocking patents Potential Linkages VC's (and others) provide key business skills. They can focus on key markets, picking the winners from a business model and management team perspective, do detailed due diligence and financing analysis, and bring a network of contacts to startups... all of which is valuable. IBM is a technology innovator that brings value with our focus on industries and customers, solution building teams, IGS, sales and marketing to customers the startups want access to, our business partner programs, and our best in breed technology. Bringing the two values together is how new economy "technology based" companies can grow profitably thereby making them and the VCs (and others) successful.

IBM Microelectronics Time Domain SiGe Chip Fab World leader in advanced semiconductor technologies Copper, SiLK, SOI, SiGe, SiON, Embedded DRAM, MRAM... #1 ASIC/SOC (System On a Chip) provider Foundry semiconductor provider Current Portfolio Candidate Time Domain SiGe Chip Fab Cash Burn Reduction for Equity VC's (and others) provide key business skills. They can focus on key markets, picking the winners from a business model and management team perspective, do detailed due diligence and financing analysis, and bring a network of contacts to startups... all of which is valuable. IBM is a technology innovator that brings value with our focus on industries and customers, solution building teams, IGS, sales and marketing to customers the startups want access to, our business partner programs, and our best in breed technology. Bringing the two values together is how new economy "technology based" companies can grow profitably thereby making them and the VCs (and others) successful.