IBM® ANNOUNCES AGREEMENT TO ACQUIRE SYSTEMCORP®
IBM® TO ADD PROJECT PORTFOLIO MANAGEMENT CAPABILITIES TO SOFTWARE DEVELOPMENT PLATFORM

ARMONK, NY, (Market Wire) October 12, 2004 - IBM today announced it has signed a definitive agreement to acquire Systemcorp ALG Ltd., a privately held company based in Montreal, Canada.

Financial terms were not disclosed. The acquisition is expected to be completed within 30 days. Following the completion of the acquisition, Systemcorp's operations will be integrated into IBM's Rational software development business, and its products will be available from IBM within 30 days of completion of the acquisition.

Systemcorp is a leading provider of Project Portfolio Management (PPM) software that provides organizations with a comprehensive view of IT projects across the enterprise. Executives, project managers and other business and technical stakeholders can use Systemcorp's Web-based PMOffice™ to track instantly all project deliverables, including budgets, tasks and risks, from the inception of a project until its completion.

By offering stakeholders comprehensive project data, analytic tools, and reports, Systemcorp's software provides the visibility needed to make objective business decisions about issues such as technology spending, and activity and resource allocation. This level of insight empowers organizations to manage their IT investments more effectively.

IBM Rational plans to integrate Systemcorp's technology into the IBM Software Development Platform. This will be complemented by the enterprise transformation expertise that IBM Global Services (IGS) and IBM Rational have gained in helping thousands of customers successfully complete IT projects ranging from software development to large-scale systems integration.

There is a growing need in the industry for comprehensive solutions that enable companies to more effectively manage their IT projects. According to industry estimates, the average Fortune 1000 organization invests over $120 million per year in IT projects. Many organizations face difficulty managing these projects, as less than half of these projects succeed, and less than 75 percent fully achieve their intended benefits.

"Tightly linking the IT organization with the goals of the overall business enables companies to take a business-driven approach to IT project and portfolio management and software development," said Mike Devlin, General Manager, IBM Rational. "This will help companies transform the way they manage themselves, which can help make them more focused, responsive and resilient while optimizing their IT investments and improving their bottom-line results."

"As an IBM business partner, we have shared a common goal of helping customers achieve business success by leveraging innovative technology across an organization," said Ari Kugler, Chief Executive Officer, Systemcorp. "Joining IBM will enable us to more tightly integrate our technology with IBM's tools and services organizations, offering customers a complete IT portfolio management solution that is unmatched in the market."

Systemcorp's customers span a variety of different industries, including retail, finance, biotechnology and automotive.

The acquisition will be effected via a plan of arrangement under applicable corporate legislation, and is subject to court approval in Canada.

About IBM®
IBM is the world's largest information technology company, with more than 80 years of leadership in helping businesses innovate. Drawing on resources from across IBM and key Business Partners, IBM offers a wide range of services, solutions and technologies that enable companies large and small to become on demand businesses. For more information on IBM's on demand strategy, visit http://www.ibm.com/ondemand

References in this publication to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in this publication may change at any time at IBM's sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. All statements regarding IBM future direction or intent are subject to change or withdrawal without notice and represent goals and objectives only.

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