News Release

IBM and Cisco Extend Alliance by Establishing Initiative for Accelerating the Mobile Networked Economy

Solution Targeted to Provide High Quality Voice and Data Wireless Services for Mobile Employees and Enable Mobile e-Commerce Opportunities
Feb 21, 2001

CANNES, France, February 21, 2001 - IBM Corporation [NYSE: IBM] and Cisco Systems, Inc. [NASDAQ: CSCO] today announced a new initiative focusing on the delivery of new communications and computing capabilities to service provider and enterprise customers. IBM and Cisco will work together to develop new solutions in a wide range of areas such as e-commerce, wireless, cable and Internet-based services, and hardware or software products. The initiative is targeted to produce a mobile wireless solution, which would enable enterprises to operate campus-based wireless services that seamlessly integrate with public wireless networks.

The campus wireless solution will be delivered through strategic wireless service providers who seek to deliver new value-added services to their enterprise customers. The solution would make it possible for mobile employees on a 2G/GSM-enabled campus to maintain continuity of wireless service, with uninterrupted access to wireless voice and data services.

"The IBM/Cisco alliance is actively pursuing opportunities in multiple areas to help customers realize the benefits of e-commerce. We believe the combined strengths of our companies provide an extraordinary level of expertise in networking hardware, software and services," said Mike G. Hill, general manager, IBM Global Telecommunications group. "Campus wireless service will give mobile service providers a way to differentiate themselves to enterprise customers and extend their e-business infrastructure."

Currently, wireless users may encounter a weak signal within an office building, plant or other facility, making it difficult to maintain a phone conversation or conduct wireless data communications. The IBM/Cisco offering would allow service providers to offer high quality wireless service when employees are on the property of an enterprise that has implemented campus-based wireless service. Service areas can be as broad as a multi-acre campus or as precise as a specific floor in a high-rise building. With the solution, mobile employees can expect high quality voice conversations and access to IP-based services such as corporate data networks or the Internet.

"The next generation wireless infrastructure for communications and data services delivery within the enterprise will combine wireless access to local IT resources and public wireless, legacy telephone and IP networks," said Ed Paradise, Vice President and General Manager, Mobile Wireless, Cisco Systems, Inc. "IBM and Cisco will make available to customers open, scaleable solutions for multi-service next generation communications, thereby accelerating business success for our customers."

This capability will provide mobile service providers with a new way to deliver enhanced wireless service to enterprise customers. These service providers will be able to better utilize their available wireless spectrum, opening new revenue opportunities within a limited and valuable resource. Continuous high quality wireless availability gives enterprises a platform to launch new mobile e-commerce offerings, augment existing communications services and deliver more content and new applications to users.

General availability of the 2G/GSM solution is planned for third quarter, 2001. Pricing will be announced at that time.