FAQs about the x86 transition to Lenovo

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1 FAQs about the x86 transition to Lenovo Q. What was announced? A. On January 23, 2014, Lenovo and IBM entered into a definitive agreement in which Lenovo plans to acquire IBM s x86 server business. The purchase price is approximately US$2.3 billion, approximately US$2.0 billion of which will be paid in cash and the balance in Lenovo stock. For more information on the announcement, please refer to: or Q. When will the transaction be completed? A. The transaction is expected to close later this year subject to the satisfaction of regulatory requirements, customary closing conditions, and any other needed approvals. Transaction closing dates may vary by country. Q. How does this announcement affect my business with IBM in the near-term? A. Until the transaction is closed, it is business as usual. Both companies expect no change in their independent, existing server operations, including customer service and product availability. Q. What IBM products will Lenovo acquire with this agreement? A. The scope of the agreement includes IBM System x, IBM BladeCenter and IBM Flex System servers, x86-based IBM Flex System integrated systems, IBM NeXtScale and IBM idataplex servers, along with IBM x86 options, system networking switches, and maintenance offerings. System software that uniquely supports the x86 server business also will be acquired, including FastSetup, ToolsCenter, Upward Integration Modules, and BladeCenter Fabric Manager. Q. What parts of its hardware portfolio will IBM retain (i.e., out-ofscope)? A. IBM will retain its non-x86 enterprise systems portfolio, including IBM System z mainframes, IBM Power Systems, IBM System Storage, and IBM POWER processor-based IBM Flex System and BladeCenter servers. IBM also will retain such products as

2 IBM PureApplication System and IBM PureData System appliances, IBM WebSphere DataPower SOA appliances, IBM WebSphere Cast Iron, and IBM Internet Security Systems (ISS) appliances. Q. What system software will IBM retain? A. IBM will retain ownership of the system software that supports both the x86 and IBM Power server businesses (cross-brand), including IBM Systems Director and IBM Flex System Manager. Additionally, IBM is retaining System Networking Switch Center. Lenovo will secure a broad license to these products through a strategic relationship with IBM in which Lenovo will market and sell these products for x86 environments and IBM will provide support and services to existing and new clients. In addition, IBM will continue to develop and evolve its Windows and Linux software portfolio for the x86 platform. IBM is a leading developer of software products for x86 servers with thousands of products and many software developers and services professionals. Q. Does IBM remain committed to the rest of its Systems portfolio? A. Yes. IBM will continue its focus and investment on high-value enterprise systems to continually evolve the unique and innovative capabilities of IBM System z, IBM Power Systems and IBM System Storage offerings. This commitment is demonstrated by recent systems and software announcements, including: o More than $1 billion investment in the new IBM Watson Group o Continued innovation on IBM s family of Power Systems and POWER processors o $1 billion investment in research and development for flash storage o $1.2 billion to expand our global cloud computing footprint to 40 datacenters worldwide in 15 countries across 5 continents o $2 billion investment in the SoftLayer acquisition o Investments in emerging markets, such as Africa

3 Q. What will happen to the existing contracts customers have with IBM? A. After the transaction closes, eligible in-scope contracts will be assigned by IBM to Lenovo. Q. Specifically, what will happen with maintenance agreements I have with IBM? A. Following the closing of the transaction, eligible in-scope maintenance agreements will be assigned to Lenovo. Lenovo will be responsible for related customer service and maintenance options and will sell maintenance for x86 products. IBM will continue to provide Technical Support Services (TSS), including warranty service, hardware maintenance, software support for x86, and around-the-clock support for critical issues, as required by Lenovo s clients, under the terms of a five-year maintenance services agreement with Lenovo. For further information, please refer to Q. Will IBM provide Lenovo with components required for its x86 solutions? A. Lenovo and IBM plan to enter into a strategic relationship that will include a global OEM and reseller agreement for the sale of IBM's industry-leading entry and midrange IBM Storwize disk storage systems, tape storage systems, General Parallel File System (GPFS ) software, IBM SmartCloud Entry offering, and elements of IBM's system software portfolio, including Systems Director and Platform Computing solutions. Q. Will Lenovo provide IBM with x86 components required for its solutions? A. Upon closing, Lenovo will become IBM's preferred supplier for x86 systems, including x86 systems that are incorporated in other IBM products. This would include the IBM Flex System chassis for use with IBM Power Compute Nodes, x86 hardware for use with IBM PureApplication and IBM PureData appliances, and x86 servers that are embedded in other IBM products. IBM does not intend to OEM and resell general-purpose x86 servers from Lenovo.

4 Q. What will this transaction mean for PureSystems? A. IBM remains committed to the PureSystems family as an important element of our growth strategy. To support that commitment, IBM has entered into a strategic collaboration with Lenovo around integrated systems. Lenovo will acquire the x86 portion of the IBM Flex System portfolio. These products will be sold by Lenovo and their business partners and Lenovo will be responsible for maintenance and services. After the sale closes, IBM plans to continue to develop, market, and support IBM PureApplication System and IBM PureData System, as well as IBM PureFlex System and IBM Flex System configurations that contain either: o IBM POWER -processor based Compute Nodes, or o Hybrid configurations, which have a mix of POWER+x86 compute nodes integrated together Clients will continue to purchase these systems from IBM and IBM Business Partners. IBM will continue to provide designers, architects, and developers to support these Systems. Lenovo will serve as a technology supplier to IBM for select components, such as the x86 compute node, chassis, and networking components required to continue to deliver x86-based PureSystems offerings. Likewise, as part of the transaction Lenovo will OEM from IBM elements of the IBM Storwize family of storage products, as well as selected software offerings. Q. What about branding and logos? A. After close of the transaction, Lenovo has license to the IBM logo and the PureFlex name for a transition period. The Flex System associated marks will transfer to Lenovo. IBM will retain IBM PureSystems trademarks for marketing and branding purposes. This includes PureSystems, IBM PureFlex System, IBM PureApplication System and IBM PureData System. Q. What will happen to the x86 roadmap after close of the transaction? A. IBM x86 server business is currently committed to a robust product roadmap needed to support long term success. Lenovo has publicly stated their commitment to follow IBM's x86 server

5 product roadmap. For further information, please refer to Q. Will this announcement affect how I buy x86 offerings from IBM Business Partners? A. Until the transaction is closed, it is business as usual; IBM Business Partners will continue to sell IBM x86 offerings. After the close of the transaction, IBM will assign business partner agreements for in-scope products to Lenovo. These Business Partners will be able to continue to resell the in-scope products that Lenovo will acquire with this agreement. Q. Will IBM continue sell x86-based High Performance Computing (HPC) solutions? A. IBM intends to address most HPC requirements using Platform Computing software, IBM Power Systems, and other products and services in IBM s portfolio. Q. Who will be building firmware upgrades for x86 servers? A. Upon closing, the building and packaging of the firmware will be performed by Lenovo. Lenovo has committed to continue to utilize IBM s industry-leading security practices and procedures to build, compile and authenticate firmware, including patches and updates. For further information about firmware, please refer to

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