1. ® © 2006 IBM Corporation IBM Software Group Processor Value Unit Licensing for Middleware Sales Skills Training for IBM Business Partners Michael Ryan, IBM Software Group Business Partner Enablement meryan@us.ibm.com

2. IBM Business Partner Processor Value Unit Sales Skills Training 2 Today’s Agenda  Customer Experience  Quote Tools  Sales Scenarios  Question and Answer

3. IBM Business Partner Processor Value Unit Sales Skills Training 3 IBM Business Partner Sales Enablement Announce July 25 JulyAugust IBM Think!Thursday Sales Series Kickoff July 27th IBM Business Partner Processor Value Unit Sales Skills Training Aug 2 nd Legacy Passport Advantage P/N overlap and availability November October

4. IBM Business Partner Processor Value Unit Sales Skills Training 4 Software Sales Deliverables and Resources  Processor Value Unit Resources for Business Partners (NOTE: IBM ID and password not required) Processor Value Unit Resources for Business Partners  Announcement Letter  July 27 th Processor Value Unit Licensing for Middleware Kickoff  audio replay available 3 days after event  August 2 nd Processor Value Unit Sales Skills Training  audio replay available 3 days after event  Processor Value Unit License Structure Overview  Sales Scenarios  FAQs  Customer Resources  Processor Value Unit Calculator Processor Value Unit Calculator  IBM ID and password required  Passport Advantage Online for Resellers Passport Advantage Online for Resellers  IBM ID and password registration site

5. ® IBM Software ©2006 IBM Corporation Processor Value Unit Licensing for Middleware Evolving The Structure To Provide a Foundation For The Future Processor Value Unit Customer Experience Education

6. Processor Value Unit Customer Experience 6 Agenda  Review of Processor Value Unit Licensing  Part number transition  Passport Advantage Online  Viewing entitlements  Value Unit Calculator  Maintenance Renewals

7. Processor Value Unit Customer Experience 7 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.

8. Processor Value Unit Customer Experience 8 Processor Value Unit Licensing has Simple Conversion Current per Processor Entitlements x 100 = New Processor Value Unit Entitlements * 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. * **

9. Processor Value Unit Customer Experience 9 With No Price Changes for our Middleware for Existing Processors*  Consistent conversion factor to create product prices  Both New Licenses and Maintenance Renewals Current per Processor Price /100 = New Processor Value Unit Price  Customer price = # entitlements X price per entitlement... UNCHANGED!* WebSphere Application Server Network Deployment on RISC Dual-core (2 cores) Price per Entitlement Number of Entitlements Extended Price Per Processor$15,0002$30,000 Conversion factorDivide by 100Multiply by 100 Processor Value Unit$150200$30,000 * There may be slight changes due to rounding with the implementation of processor value units in some countries

10. Processor Value Unit Customer Experience 10 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

11. Processor Value Unit Customer Experience 11 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

12. Processor Value Unit Customer Experience 12 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

13. Processor Value Unit Customer Experience 13 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

14. Processor Value Unit Customer Experience 14 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

15. Processor Value Unit Customer Experience 15 New Part Numbers, but No change to Part Number Structure WAS ND Processor  Part number structure unchanged  License + 12 months of Maintenance  Maintenance Renewal  Maintenance Reinstatement Part Number Structure Unchanged Note: Example above assumes processor value unit assignment = 100 (eg. single-core chip type) WAS ND Value Units

16. Processor Value Unit Customer Experience 16 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

17. Processor Value Unit Customer Experience 17 PA Online – Value Unit Calculator

18. Processor Value Unit Customer Experience 18 Processor “Value Unit Calculator” Guided Mode selected Question: On which server vendor are you deploying your software? Choices: IBM, Dell, Fujitsu, HP, Sun, Other Action: Choose IBM Question: On which processor architecture are you deploying your software? Choices: x86, RISC, IA-64 (Itanium), Other Action: Choose x86

19. Processor Value Unit Customer Experience 19 beginning.  Expert Mode Selected: Provides 3 optional selection paths to choose from to identify processors 1.Processor Architecture 2.Server Vendor 3.Processor Vendor Processor “Value Unit Calculator” Expert Mode Selected After picking Expert mode, Pick one Selection Path 1 2 3

20. Processor Value Unit Customer Experience 20 PA Online – Reporting of Entitlements

21. Processor Value Unit Customer Experience 21 PA Online – Reporting of Entitlements

22. Processor Value Unit Customer Experience 22 PA Online – Reporting of Entitlements

23. Processor Value Unit Customer Experience 23 PA Online – Reporting of Entitlements 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 * For products using the per processor metric only

24. Processor Value Unit Customer Experience 24 PA Online – Maintenance Renewals

25. Processor Value Unit Customer Experience 25 Thank you!