Year: 2004

The company announces the IBM eServer zSeries 890, a powerful mainframe for
medium-sized enterprise customers. It extends the capabilities of the company's
flagship IBM eServer zSeries 990 mainframe to mid-sized companies at a lower entry
cost and size.

IBM introduces the eServer i5, the first systems to be powered by the much
anticipated POWER5 microprocessors. Running i5/OS, the next generation of OS/400,
the new eServer i5 systems provide small and medium-sized businesses with
unprecedented power, flexibility and cost benefits.

Also rolled out are the IBM eServer p5 595 and eServer i5 595 to provide powerful
capacity, virtualization capabilities and performance, along with the new 32-way
IBM eServer p5 590 -- up to 45 percent faster and costing 45 percent less than its
predecessor, the highly successful eServer pSeries p690. The three new systems
introduce new economics to the IT industry by providing the ability to run over
250 virtual servers on a single machine.

The company announces IBM TotalStorage DS6000 and DS8000 data storage systems that
bridge the gap between once incompatible high-end and midrange storage classes.
(The DS6000 series begins at just 580GB and scales up to 67.2 terabytes in a box
only slightly larger than a VCR. The DS8000 series is available in dual two
processor or dual four processor configurations, and can address over 96 petabytes
of data -- or more than 4,500 times the amount of information found in the Library
of Congress.)

IBM debuts the first ThinkPad with an integrated fingerprint reader. Selected
models of the ThinkPad T42 offer an unmatched level of data protection through a
new biometric capability and embedded security subsystem.

IBM says that it is working with the New York Stock Exchange on a new order
management and messaging system in support of the 1.6 billion shares traded daily.
The system will be one of the world's most sophisticated examples of "Extreme
Availability," relying on IBM computers, infrastructure software and engineering
expertise for a network designed to virtually eliminate downtime.

Mayo Clinic and IBM announce a broad collaboration to accelerate advances in
patient care and research with an aggressive set of technology initiatives. The
collaboration will focus on new techniques to harness patient data to improve
diagnoses, deep computing power to model diseases to find cures, and new devices
to access information to transform how patients and physicians interact, leading
to more individualized care. Under the collaboration, Mayo Clinic will be the
first medical institution to tap the power of IBM's Blue Gene supercomputer.

With 3,248 patents in 2004, IBM earns more U.S. patents than any other company for
the twelfth consecutive year. IBM has 1,314 more patents than any other company.
This is the fourth consecutive year IBM has received more than 3,000 U.S. patents
and remains the only company to receive more than 2,000 patents in one year.

IBM, along with representatives of the world's leading science, education and
philanthropic organizations, launches World Community Grid, a global humanitarian
effort that applies the unused computing power of individual and business
computers to help address the world's most difficult health and social problems.

The company announces the next step in its On Demand Community volunteer
initiative by enabling its approximately 160,000 retirees to leverage new
technology tools to increase the impact and value of volunteer efforts in schools
and local agencies across the globe. For retiree volunteers who donate time to
community organizations, On Demand Community provides access to innovative new IBM
technology that will help clients of senior centers and organizations for the
disabled access and see the Internet better.

At the end of the year, IBM Chairman Samuel J. Palmisano authorizes a preliminary
allocation of $1 million to support relief efforts for the victims of the tsunamis
that struck southern Asia on December 26. IBM Crisis Response Teams in India,
Indonesia, Sri Lanka and Thailand are deployed to assist local governments and
relief organizations.

Lenovo Group Limited -- the leading Personal Computer brand in China and across
Asia -- and IBM announce in December a definitive agreement under which Lenovo
will acquire IBM's Personal Computing Division to form the world's third-largest
PC business.