Year: 2000

The year begins with a Y2K-related drop-off in customer demand and the collapse of
the dot-coms. If 2000 is seen as a watershed for e-business, 2001 is the year the
world's established enterprises awake to its true possibilities -- and information
technology requirements. In addition, IBM debuts a new generation of servers --
the eServer -- for meeting entirely new, unprecedented demands on the underlying
infrastructure supporting e-business.

The 2000's are also marked by a transition in IBM's leadership. Samuel J.
Palmisano becomes president and chief operating officer in 2000 and then, two
years later, he is named chief executive officer of IBM. As CEO, Palmisano
succeeds Louis V. Gerstner, Jr., who remains IBM chairman through 2002.

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IBM introduces the IBM eServer, a new generation of servers featuring
mainframe-class reliability and scalability, broad support of open standards for
the development of new applications, and capacity on demand for managing the
unprecedented needs of e-business. The new servers feature technology from IBM's
high-end servers applied across the entire product line, and include: the eServer
zSeries -- the most reliable, mission-critical data and transaction server in the
industry; eServer pSeries -- the most powerful, technologically advanced UNIX
server; eServer iSeries -- the high performance, integrated business server for
mid-market companies; and the eServer xSeries -- the affordable Intel-based server
with mainframe-inspired reliability technologies.

In building and managing the technology infrastructure for the Sydney 2000 Olympic
Games, IBM turns in a Gold Medal performance. The official Games Web site, powered
by IBM, handles unprecedented Internet traffic with 11.3 billion hits, a 1,700
percent increase over the Nagano Games official site in 1998. More than 13 million
lines of software code are written and thoroughly tested before the Games begin.
Nearly 6,000 people provide technology support for 300 medal events in 37 sports
competitions held in 39 venues. More than 7,300 IBM PCs and ThinkPads are
connected to the Olympic Games information technology network, 540 Netfinity
Servers support the Games Management System by storing massive amounts of data, 50
IBM RS/6000 PC and three RS/6000 SP servers manage and organize data generated by
Olympics.com and an intranet system, and three S/390 Parallel Sysplex power the
Central Results System.

In IBM's most dramatic and significant rollout of desktop technology since the
Personal Computer of 1981, the company announces in March the NetVista brand of
new personal computing devices, including next-stage PCs, Internet access devices
and thin clients. Among the products introduced are the NetVista All-in-One high
performance device, NetVista Legacy-Free PC, NetVista Internet Appliance, and
NetVista Zero Footprint Thin Client.

IBM is awarded the 2000 U.S. National Medal of Technology for the company's record
of innovation in storage technology. This marks the seventh time that IBM and its
scientists have received the nation's highest award for technological innovation,
more than any other company or organization.

Samuel J. Palmisano becomes president and chief operating officer, and John M.
Thompson becomes vice chairman.

IBM names Harriet P. Pearson as its first chief privacy officer to guide the
company's privacy policies and practices, lead initiatives across IBM to
strengthen consumer privacy protection and further the company's leadership
efforts in those areas.

IBM debuts a commercial version of ASCI White -- the most powerful supercomputer
in the world. The new RS/6000 SP system uses performance-enhancing copper
microprocessors, silicon switching technology and advanced software to provide
e-businesses with the unmatched processing speed, scalability and reliability
needed for demanding e-commerce applications.

IBM makes the largest capital investment in its history -- $5 billion -- and
announces plans in October to build the world's most technologically advanced
chip-making facility in East Fishkill, New York. The new $2.5 billion facility
will combine for the first time anywhere IBM chip-making breakthroughs such as
copper interconnects, silicon-on-insulator and low-k dielectric insulation on
300mm wafers. Planned to begin operations in late 2002, the new facility will add
1,000 new jobs as it reaches full production the following year.