Streamlining Middleware Licensing with Processor Value Units

1. Processor Value Unit Licensing for Middleware Evolving The Structure To Provide a Foundation For The Future Processor Value UnitCustomer Experience Education

2. Agenda • Review of Processor Value Unit Licensing • Part number transition • Passport Advantage Online • Viewing entitlements • Value Unit Calculator • Maintenance Renewals

3. Introducing Processor Value Unit Licensing • Middleware will be licensed in processor value units • Each processor core assigned a specific number of processor value units • Acquire the appropriate number of value units for each processor core • Each middleware program has a unique price per value unit • Processor value units are transferable among systems by product within the enterprise * Power PC 970 and Power 5 QCM dual-core chips require 50 Value Units ** T1 entitlements per processor adjusted with the elimination of fractional licenses.

4. Current per Processor Entitlements x 100 = New Processor Value Unit Entitlements * ** Processor Value Unit Licensing has Simple Conversion * Power PC 970 and Power 5 QCM dual-core chips require 50 Value Units ** T1 entitlements per processor adjusted with the elimination of fractional licenses.

5. Current per Processor Price /100 = New Processor Value Unit Price With No Price Changes for our Middleware for Existing Processors* • Consistent conversion factor to create product prices • Both New Licenses and Maintenance Renewals • Customer price = # entitlements X price per entitlement . . . UNCHANGED!* * There may be slight changes due to rounding with the implementation of processor value units in some countries

6. Benefits Of The Processor Value Unit Structure • Creates simple licensing structure • Avoids fractional licensing for multi-core chips • Provides flexibility and granularity • Enables sub-capacity licensing • Positions for future • Continue to deliver software price performance improvements • Provides clarity to middleware licensing • Over time, new processors will be differentiated based on relative performance • No price changes for middleware on existing processors

7. New Orders will be in Processor Value Units • IBM will replace all per processor part numbers with per value unit part numbers • All new orders will be in processor value units • New proofs of entitlement will be in processor value units • Maintenance renewals will be in processor value units • Existing proofs of entitlement will remain per processor • All per processor maintenance entitlements will be converted to processor value unit entitlements on July 25, 2006 • Old part numbers are valid until November 10, 2006 • Quotes generated prior to 7/25/06 will still be valid • New quotes will be in processor value units

8. Quotes Issued Before July 25th • During the transition period, per processor part numbers still process through Nov. 10, 2006 • Quotes with per processor parts converted to an order prior to Nov. 10 will process • Order History will reflect per processor part number • Proofs of Entitlement will reflect processor value units • Outstanding Quotes or Open Line Items after Nov. 10 • Will need to be updated to processor value unit part numbers • Recommendation • Close all outstanding quotes by October 31st • Issue all new quotes in processor value units

9. Processor Value Unit Part Numbers and Pricing Implementation • Established processor value unit part numbers • Replacing 1300+ per processor part numbers • Each per processor part number is replaced by a processor value unit part number • License plus 12 months maintenance, maintenance renewal, etc. • Price and Passport Advantage Point Rounding • U.S. Dollars and Passport Advantage points were rounded to nearest two decimals • Some prices may be impacted +/- 1% by currency or country rounding • Passport Advantage point rounding should not impact customer band level • Created packs of 10 processor value units as the minimum order quantity for programs where: • Per processor license plus maintenance price was less than US$1,250.00 • Maintenance was less than US$250 • Simplicity was needed for billing and administration • For example, US$100/100 = US$1.00 and when discounted would be below $1.00

10. 10 Processor Value Unit Minimum Order Quantity Example Per Processor Structure Part Number Description • Processor Value Unit Part Number Description • Implementation of 10 processor value unit part number

11. New Part Numbers, but No change to Part Number Structure • Part number structure unchanged • License + 12 months of Maintenance • Maintenance Renewal • Maintenance Reinstatement Part Number Structure Unchanged WAS ND Value Units WAS ND Processor Note: Example above assumes processor value unit assignment = 100 (eg. single-core chip type)

12. Passport Advantage Online • Customer secure web tool • Access point for: • Value Unit Calculator • Entitlement Records • Maintenance Renewal notifications • Other features not associated with processor value units • Web address Ibm.com/software/passportadvantage - Choose Passport Advantage Online - Choose For customers

13. PA Online – Value Unit Calculator

14. Processor “Value Unit Calculator” Guided Mode selected Question: On which processor architecture are you deploying your software? Choices: x86, RISC, IA-64 (Itanium), Other Action: Choose x86 Question: On which server vendor are you deploying your software? Choices: IBM, Dell, Fujitsu, HP, Sun, Other Action: Choose IBM

15. beginning. Processor “Value Unit Calculator” Expert Mode Selected After picking Expert mode, Pick one Selection Path • Expert Mode Selected: Provides 3 optional selection paths to choose from to identify processors • Processor Architecture • Server Vendor • Processor Vendor 1 3 2

16. PA Online – Reporting of Entitlements

17. PA Online – Reporting of Entitlements

18. PA Online – Reporting of Entitlements

19. The part number description will change to value units* The quantity field will be multiplied by 100 and will be reflected in processor value units PA Online – Reporting of Entitlements * For products using the per processor metric only

20. PA Online – Maintenance Renewals

21. Thank you!