IBM Systems Group © 2006 IBM Corporation IBM Server Group Announces… The Bid Machine Reseller Guide Q4 2009

IBM Systems Group © 2006 IBM Corporation Page 2 Sections in this Guide… The Bid Machine Concept How does it work? Common Questions & Answers

IBM Systems Group © 2006 IBM Corporation Page 3 Bid confidently with IBM: we will approve a winning price in 8 business hours ●Benefits for you: Aggressive, pre-approved discounts on leadership IBM technology* Approval from IBM in only 8 business hours* The full range of IBM Tape, Midrange disk storage, SAN, System x servers, server options and ServicePacs are eligible Access to leading IBM EXA, BladeCenter and TotalStorage technologies No IBM “red tape”, no fuss, no delays * Subject to qualification conditions The Bid Machine Proposition

IBM Systems Group © 2006 IBM Corporation Page 4 Positioning IBM Channel programs… €0 €100K €150K €10K Immediate Delivery from your Distributor’s Stock RAPID, DELEGATED PROCESS COMPLEX BID Unusual Configurations Typically ordered from IBM Bid Machine Express Seller Special Bid Use Express Seller when… ●You need immediate availability of product ●You want the freedom to negotiate your own price – fast! ●You want to maximise your IBM marketing funds ●Leverage Bid Machine when you need options not in the Express Seller portfolio Use Special Bid when… ●You have a unique, complex configuration above €100K ●Immediate delivery is not a requirement ●You need configure-to- order services ●You have a multi-country opportunity Use Bid Machine when… ●You need a special price approved – fast! ●You have an opportunity up to €100K ●You have an Express Seller opportunity above €6K ●You want to be sure of the discount that will be approved ●Your opportunity is in one country Immediate Approval8 Business Hour ApprovalNo committed approval time Total List Price Value

IBM Systems Group © 2006 IBM Corporation Page 5 How does it work?

IBM Systems Group © 2006 IBM Corporation Page 6 How does the Bid Machine work? Every quarter IBM issues a discount “grid”. This tells your distributor the maximum discount that is “pre-approved” through the Bid Machine You can use this grid to negotiate a price with a customer without ever contacting IBM, in the knowledge that (assuming the qualifying conditions are met) the bid will be approved When and only when the bid is won, ask your Distributor to fill in and send the appropriate Bid Machine Request to IBM Assuming the qualifying conditions are met, the bid will be approved within 8 business hours The order must be placed by the end of the month after the bid was requested in, otherwise the bid approval will no longer be valid That’s it! Five easy steps to getting a fast, winning price on the best IBM technology

IBM Systems Group © 2006 IBM Corporation Page 7 The Bid Machine for Part Number Products Qualification Conditions Each Bid Machine request should match the following conditions – otherwise it will either be rejected or will not be approved within 8 business hours… 1.The bid should already be won 2.Only requests for discounts up to the levels communicated in this quarter’s Bid Machine grid will be accepted. Any requests deeper than this grid will revert to normal IBM Special Bid processes. Ask your Distributor for details of the discounts available this quarter 3.The Total List Price must be above the local currency equivalent of the region clip level (variations apply). 4.You must provide the end-user name and address and the IBM customer number if available and the VAT number if not 5.Only IBM System x Server systems, related System x options, ServicePac and HVEC Storage options with part numbers may be included in a Bid Machine request. Lenovo products such as ThinkPad, InfoPrint products, and other eServer brand products are not eligible for Bid Machine requests 6.The Bid Machine request must be for an order to be placed by the end of the following calendar month. Any request for orders or shipments beyond that date is not eligible 7.The first order you send must be for a List Price value above the clip level associated with the discount you requested. Additional orders for the same bid can then be placed at any value 8.IBM Custom Models are excluded from Bid Machine requests 9.Global and pan-EMEA bids are excluded from Bid Machine requests

IBM Systems Group © 2006 IBM Corporation Page 8 ●Before you submit a Bid Machine request (and the final purchase order or claim too), make sure the order value is higher than the following for your local currency… otherwise it will be rejected ●The total List Price of all products (System x servers, options, Storage products and ServicePacs) should be added together and compared to these clip levels to see which level of discounts apply. If the total is above either clip level ask your Distributor for details of the extra discount available Clip Levels For Eligibility – Q4 2009

IBM Systems Group © 2006 IBM Corporation Page 9 8 Hour Commitment – what is it? IBM aims to respond to your Bid Machine request within 8 business hours (excluding evenings, weekends, public holidays), provided that the conditions for the Bid Machine request are met. ●As long as you follow the guidelines in this document, you can be sure of fast, efficient service ●Anything outside of the qualification conditions (eg. Requests below the clip level, or including products not eligible for the Bid Machine program) will not qualify for an 8 hour response ●A request for an end-user who is new to IBM (so has no IBM customer number) can take up to 5 days while a customer number is allocated ●If there is a complication to the request (for example, there is already another deeper discount request for the same customer from another reseller) we may take longer than 8 hours to respond while we investigate the situation and get advice from the IBM account owner

IBM Systems Group © 2006 IBM Corporation Page 10 ●For Part Number Products: once the bid is approved, the BP has until the end of the next calendar month to place a Purchase Order ●For Machine Type Model Products: Once the bid is approved, the Business Partner has 90 days to place a Purchase Order ●The PO or claim must refer to “Bid Machine” ●The value of the FIRST order must be above the clip level for the discount you are claiming – you may then place additional orders of any value against the same approved bid up to the bid end date ●There can be no additional brands added to the order ●The approved discounts for the named end-user cannot be changed ●Claims validated by IBM as outside of the qualifying conditions may result in the order being rejected or the discount applied being invoiced back to you at a later date When the Purchase Order is placed….

IBM Systems Group © 2006 IBM Corporation Page 11 Questions & Answers

IBM Systems Group © 2006 IBM Corporation Page 12 Questions & Answers – Part Number Products Can I include Express Seller part numbers in a Bid Machine request? Yes! Express Seller part numbers are eligible for inclusion in Bid Machine requests. However Express Seller part numbers have a different delegated discount than non-Express Seller part numbers and are only eligible for Bid Machine discounts when the total transaction value is above €6,250 or local currency equivalent. As your Distributor for details. What if my order is only just below the clip level? Will IBM still approve it because it is so close? During the Bid Machine validation process, which takes place once a calendar quarter after the quarter has finished, we permit up to 10% flexibility on the clip levels to allow for currency fluctuations and reasonable late configuration changes. However to ensure that your order or claim passes the validation process you must ensure that it is not substantially lower than the published clip level. Are VMWare and other System x Software options eligible for Bid Machine discounts? Yes, they are eligible for the System x Software Options discount What if I need an exception (e.g. deeper discount)? For transactions above €100K in total value you can ask your Distributor to submit a normal IBM special bid request asking for different conditions, but then the approval is not guaranteed (it is subject to a financial analysis by IBM) and the 8-hour response commitment does not apply. For smaller transactions contact your Distributor or IBM relationship manager to discuss why your opportunity is an exception.

IBM Systems Group © 2006 IBM Corporation Page 13 How to get the latest information ●The latest version of this Guide, together with the latest Request Form are available on the IBM PartnerWorld Web Site. ●The address for Bid Machine information is: