IBM Tops Analyst Rankings of Worldwide and US Application Management Services Companies for Fourth Consecutive Year

Market Wire, December, 2006

IBM today announced that it has been ranked as the world's leading application management services company for the fourth consecutive year, according to IDC. In its recent study, "Worldwide and US Application Management Services Vendor Shares, 2005: IDC's Top Ten Vendors," IDC reports that IBM (NYSE: IBM) holds the number one position in worldwide application management services revenue. Additionally, according to IDC, IBM is the top vendor in application management services in the US, collecting 20.6 percent of total US revenues in 2005. [1]

"IBM continues to show itself as a nimble and innovative competitor in Application Management Services," said Barry Rubenstein, Program Manager, Application Outsourcing & Offshore Services at IDC. "IBM is differentiated in its ability to shift work around its global network of service centers, as customer and delivery needs dictate, and it is utilizing its presence in emerging markets such as Brazil, Eastern Europe, India, and China as a beachhead for clients looking to enter those markets. Not only is IBM able to deliver services from nearly any location, it is also able to use that presence to help clients become more global themselves -- a two-way street that truly unleashes the power of globalization."

"IBM has been able to consistently remain the market leader in application management services by meeting our clients' needs for application development and management services, while harvesting best practices and deploying them globally, and continuously investing in skill development around the world," said Katherine Hegmann, General Manager for Application Services, IBM Global Business Services. "By providing our clients with new efficiencies and innovation in the applications that run their businesses, we enable them to focus their resources on growth and delivering increased value to their customers."

IBM's growth in application management services was driven by investments in new capabilities to strengthen its position in developing and managing applications, as well as continued focus on furthering its global reach and delivery. Additionally, IBM's investment in standardized services to provide customers with Services Oriented Architecture, has fueled growth in its application management services business. IBM recently signed application management services contracts with Thomson Scientific and HypoVereinsbank.

IBM's portfolio of application management services addresses client needs for business and technology expertise, increased productivity, flexibility, and value. The portfolio includes offerings ranging from: IT focused staff augmentation -- where IBM application experts team with companies to address skill and resource shortages; business application modernization -- where IBM aligns companies' business objectives and IT investments; and assisted transformation -- where IBM optimizes applications to help companies drive revenue, focus on core competencies and improve speed to market.

IBM is also continuing to grow in locations around the world, most recently announcing an agreement with the Chengdu High-Tech Zone in China, to establish a Global Delivery Center within the Chengdu Tianfu Software Park. Scheduled to be operational by February 2007, this new center will provide multilingual application development and maintenance services to clients globally in English, Japanese and Chinese, and to IBM's Global Procurement Center, recently located in Shenzhen, China.

IDC's market share study evaluates the top 10 application management services vendors, both worldwide and in the United States, and ranks them based on these two geographic regions according to 2005 revenue from contracts primarily designed to provide application management services. It provides an analysis of the competitive landscape in 2005 and discusses key trends in areas such as hosted application management services, high-end services, the increasing importance of packaged applications, and the evolving role of global sourcing.

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[1] Based on IDC, Worldwide and U.S. Application Management Services Vendor Shares, 2005: IDC's Top 10 Vendors, Doc #203995, Oct 2006.

Contact: Jenny Galitz IBM Media Relations galitz@us.ibm.com 917-472-3426