IBM LOTUS PASSPORT ADVANTAGE OFFERING

IBM Lotus Passport Advantage Offering

Software Announcement
April 28, 1998
Announcement Letter Number: 298-143




At a Glance

Passport Advantage

  • Offers worldwide program consistency, terms and conditions, and aggregated acquisitions
  • Single offering for IBM and Lotus Workstation Software
  • Includes Software Subscription and Support
Three options address different customer requirements
  • Volume Purchase Option (VPO)
    • Low entry levels
    • No agreement required
    • Acquisitions aggregate toward better price bands
    • Ability to leverage multiple locations
    • Software Subscription is available
  • Contract Option (CO)- Forecast
    • Two year agreement based on points forecast
    • Discount level dictated by two year forecast
    • Customer receives discount with first order
    • Minimum Order Quantity Required
    • Leverages purchasing power by aggregating acquisitions worldwide
    • Includes Software Subscription, and Support is also available
  • Complete Enterprise Offering (CEO)
    • Two year agreement based on total number of users in your enterprise
    • Lowers total cost of software acquisition, use, and management
    • Leverages purchasing power by aggregating acquisitions worldwide
    • Includes Software Subscription and Support
    • Provides customers flexibility to tailor deployment and migration plans



Overview

IBM and Lotus (R) Software and Support in a Single Agreement

IBM and Lotus are pleased to announce their new and improved workstation software offering, Passport Advantage. For the first time ever, you can acquire IBM and Lotus software under a single offering. Passport Advantage enables you to integrate software and support acquisitions in a single agreement.

The Passport Advantage Offering provides the lowest cost for software acquisition and management on a worldwide basis. Acquisitions can be made anywhere in the world under a single agreement, allowing you to accumulate discounts worldwide.

Sized for Your Needs

Under the new offering, you can choose from three options designed to fit the way you acquire and manage applications, middleware, and operating system software.

  • Volume Purchase Option (VPO)
  • Contract Option (CO)
  • Complete Enterprise Option (CEO)
Stay Up to Date

The Passport Advantage Offering includes Software Subscription, an option which:

  • Lets you install the most current versions, releases, and updates when available for programs you have enrolled

  • Protects your investment in Lotus and IBM software
In lieu of Software Subscriptions, some products that do not revise often may offer a single upgrade use authorization.

An additional enhancement to the Passport Advantage Offering is the inclusion of new Customer Support options. These new options provide telephone and electronic software support, enhanced delivery, and improved consistency across IBM and Lotus.

Under the Passport Advantage offering, customers acquire the right to copy, use, or extend the use of, as applicable, eligible Programs, up to the level of use authorized in their Proof of Entitlement, and their associated user documentation. Customers agree that they have obtained their first copy of the Program. IBM makes available, for an additional fee, a Passport Advantage media pack which contains the program media.



Intended Customers

Passport Advantage has been designed for all customers from small businesses to multi-national enterprises. Customers currently participating in IBM Software Advantage, IBM Strategic Account Offering, and Lotus Passport (TM) are encouraged to enroll in Passport Advantage today.



Key Prerequisites

Passport Advantage is available to any customer who has a need for IBM software on Intel and/or Unix platforms or any Lotus software.

Availability Date

April 28, 1998

Effective April 28, 1998, no new IBM Software Advantage, Strategic Account Offering (SAO), ValuPass, or Lotus Passport agreements may be offered, and no new products will be added to the eligible product lists of any of these offerings. Existing agreements may not be extended or renewed after August 31, 1998.

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This announcement is provided for your information only. For additional information, contact your IBM representative, call 800-IBM-4YOU, or visit the IBM home page at: http://www.ibm.com



DESCRIPTION

IBM Lotus Passport Advantage offering allows customers to choose from three options designed to accommodate a broad range of needs. These options are the Volume Purchase Option (VPO), Contract Option (CO) -- Forecast, and the Complete Enterprise Option (CEO).



Software Subscription

Software Subscription: Software Subscription (previously called Upgrade Protection under SW Advantage and Maintenance under Passport) is the strategy for staying up to date. It simplifies the way customers gain access to the most current releases of our products, for a defined period of time based upon the program option selected. Software Subscription is designed to protect a customer's software investment by offering the most current software enhancements, future releases, and proactive media delivery upon new releases.

Single Upgrade: For some products that do not revise often, Single Upgrade use authorizations may be offered in lieu of Software Subscriptions. Customers can access the latest release of a product by acquiring the single upgrade license. Single Upgrades offer a simple and easy way to gain access to the latest release, not future releases. Customers who already have a license for a previous version of a product simply acquire the Single Upgrade media and use authorization when they need it.



Customer Support Choices

New within the Passport Advantage Offering is the ability to acquire IBM and Lotus customer Support. Passport Advantage Customer Support offers simple, flexible support designed to supplement a customer's support staff. Support is an integral part of the Passport Advantage offering and is designed to be consistent with customers' purchasing preferences under all three acquisition options: Volume Purchase, Contract, and Complete Enterprise. The primary Support offering is annual support with designated callers. Lotus incident support and IBM per call support are also available for customers.

Support with Designated Callers: Available in CO and CEO, it supplements a customer's technical support staff, and is not intended as an end user support offering. Support with Designated Callers is designed to meet the support requirements of a customer running multiple IBM and Lotus products in a complex environment. It provides telephone and electronic cross-platform support for routine short duration installation and usage (how to) questions and code related problems. A broad set of workstation products are supported.

Once support is purchased for a set of products, a customer can gain assistance through designated callers with questions or problems which span those products. This option does not extend the announced end of service and support date of any eligible product.

In Contract Option, support is acquired on a per program basis. Customers can acquire support through an annual payment via a combined Software Subscription and Support part number, or can acquire Support on a standalone basis. In Complete Enterprise Option, both Software Subscription and Support are included within the software use authorization.

  • MQ (TM) Series Support will be available in Passport Advantage. The SMSO option that was announced under Software Advantage will not be withdrawn, but it will NOT be available to Passport Advantage and will end when the customer's Software Advantage contract ends, or Software Advantage is withdrawn.
The customer receives:
  • Telephone access via the Country Single Point of Contact (SPOC) to IBM and Lotus worldwide customer support.

  • In selected countries, the additional option, at no additional charge, to submit questions electronically.

  • Support for routine, short duration usage (how to) questions and code related problems for covered products.

  • Support during country normal business hours (definition follows).

  • A response within two hours during normal country business hours for voice and electronic mail. The response time goal for customer critical/emergency calls (voice) during offshift is two hours.

  • Off shift support in selected countries for selected products (CO) or product category (CEO) for an additional fee for every authorized contact requiring off shift support. This fee will be discounted across the Passport Advantage levels. Refer to the Country Unique Support document for products and product suites available for off shift by country. Unique support processes like language are also highlighted in the Country Unique Support document.

  • Access to hints, tips, and frequently asked questions

  • Access to escalation management 24 hours a day, seven days a week
General Terms

Definitions for Passport Advantage Support are as follows:

  • Normal Business Hours: Prime Shift hours are the country business hours Monday through Friday, excluding national and or statutory holidays.

  • Off Shift: All hours outside normal business hours, including national and/or statutory holidays.
Customer Responsibilities
  • A designated caller must be available to work with the IBM or Lotus staff during the entire time IBM or Lotus is providing support outside of prime shift business hours.

  • The originating site will identify a sponsoring technical contact at agreement signing. The sponsoring customer will be responsible to distribute the designated callers across the account. It is the customer's responsibility to reassign and inform Lotus if the designated callers or sponsoring technical contact changes at any time.

  • The customer agrees that each designated caller status is assigned to only one technically trained person and cannot be shared. It is the customer's responsibility to manage who uses the ID and to give IBM and Lotus required profile information, including name, country, address, time zone, and phone of the authorized contact.

  • Designated callers may call on any IBM and Lotus supported products across the contract as long as they are technically skilled on that product.



IBM Lotus Responsibilities

IBM and Lotus will provide telephone support (and in selected countries electronic access) to product specialists who will:

  • Be available to provide support during the designated caller's selected period of coverage. IBM and Lotus' objective is to respond to customers within a maximum of two business hours of receiving their calls during normal business hours.

  • Answer specific, task-oriented problems or questions pertaining to the use and operation of currently supported products and refer the caller to specific IBM or Lotus product documentation or publications for additional information and instructions.
Other Terms and Conditions

This support offering does not extend the announced end of service and support of any eligible product.

Lotus Incident Based Support: Available for all Lotus products in Volume Purchase Option and is a support alternative for Lotus Contract Option products. Lotus Incident Based Support is suited for customers who need support on a specific product area. Customers may purchase a package of support calls, which, for a fixed price, entitles them to call with questions or problems.

IBM Per Call Support: Available to all Volume Purchase Option and Contract Option customers. Customers can contact IBM with questions or problems and pay on a per call basis. Per Call Support is recommended for customers with minimal support requirements, who are not running in a complex, mission-critical environment.

Additional Software Support Services: Available to handle customer needs beyond this offering. Contact your IBM and/or Lotus Business Partner representative for details.

Program Services: Program services include the ability to submit problems and questions via fax and electronic mail seven days a week.



ACQUISITION OPTIONS



Volume Purchase Option (VPO)

The Volume Purchase Option is a simple, flexible way for customers to acquire IBM and Lotus use authorizations, Software Subscription, Single Upgrades in lieu of Software Subscription, and Lotus Incident Based Support in volume without having to make a contractual commitment. It's a great choice when acquiring software for a small business, a workgroup, or a department in a decentralized organization. Customers earn volume discounts based on cumulative totals of use authorizations and single upgrades, or Software Subscription and Lotus Incident support acquisitions, and they can combine acquisitions for multiple sites anywhere in the world. The Volume Purchase Option requires no agreement be signed by IBM and/or Lotus, the reseller, or the customer.

Volume Purchase Option Details

  • Customer-transaction-based, "pay as you go" offering

  • No customer agreement or forecast necessary

  • Customer price band level dictated by cumulative point value. Point values are associated with each product.

  • Exclusive VPO part numbers and price list available at three levels:
    • A = 25 points
    • B = 250 points
    • C = 1,000 points
  • Point Values for all products and services excluding IBM Hourly Support Coverage, Media and Documentation Packs

  • Minimum entry of 25 points, reorders at 10 points minimum

  • Software use authorizations, Software Subscription, and Single Upgrade in lieu of Software Subscription and Support are available

  • Up to five additional sites to leverage price band level
Software Subscription
  • Sold with the program, at renewal as well as after acquisition

  • Available for 12 or 24 months

  • Based upon transaction anniversary date, no proration, clean 12 or 24-month coverage

  • Allows you to keep up-to-date with the most current releases, and versions of eligible products
Customer Support
  • Passport Advantage Customer Support
    • Incident Based Support sold via Passport Advantage

    • Points earned

    • Telephone based

    • Available for all Lotus products

    • Available as 10, 20, 30, and 50 packs

    • Reorder when required at end of annual coverage
  • IBM Support
    • Telephone based

    • Available for all eligible IBM products

    • Per Call rates

    • Sold separately outside the Passport Advantage offering

    • No Passport Advantage points earned or associated with this sale
Deliverables
  • Welcome kit with exclusive agreement number

  • Passport Advantage Proof of Entitlement after order is placed

  • Media delivered to Software Subscription customers upon new version or release availability

  • Documentation and Media Packs sold separately, available only via Passport Advantage. No point value or aggregation under Passport Advantage
Process Overview: An IBM Lotus authorized representative determines the Suggested Volume Pricing (SVP) level based on the customer's initial order. The minimum initial order is 25 points. Additional acquisitions, including use authorizations, subscription, and Support, can be made at any time, but each order must be for a minimum of 10 points. The representative quotes final pricing based on the customer's determined SVP level.

The initial order, accompanied by an Enrollment Form, enrolls a customer as an originating site for Passport Advantage Volume Purchase Option, and assigns them a Passport Advantage number.

Customers are sent a welcome kit, which includes their Passport Advantage Number.

Up to five additional sites may acquire under an existing Passport Advantage membership Enrollment Form. Each additional site's Enrollment Form must be submitted to Lotus by the originating site. Each enrolled site will be assigned a unique Passport Advantage number, which is linked to the originating site's Passport Advantage number.

Each additional site must have one contact who has the authority to issue purchase orders for all acquisitions for that site. The initial order begins the customer's point balance accumulation, which determines the ongoing SVP level. The SVP level is adjusted monthly to reflect the latest total of all acquisitions made under the customer's Passport Advantage number.

Lotus sends Installation, Software Subscription and Support Proof of Entitlement certificates to each site for each order processed. The certificates provide compliance confirmation to the customer for all acquisitions, and include the contact name and address listed on the Enrollment Form for that Passport Advantage Number. Installation certificates must be received before the products can be installed.

Each individual site can add Software Subscription at any time. Software Subscription is billed in advance for each year of coverage, and renewed at the purchase anniversary date. Customers may also purchase Software Subscription for additional years upfront.

Contract Option (CO) -- Forecast: Designed for organizations which can forecast their software and support needs, then commit to making acquisitions of IBM and Lotus software, Software Subscription and Support totaling at least 1,000 purchase points or more during a two-year agreement period.

Contract Option customers receive their agreement price level beginning with their first order and can combine acquisitions to meet their agreement commitments. This option gives organizations the flexibility to acquire what they need when they need it, as long as they meet their milestones during the agreement period. Additional customer locations or sites anywhere in the world can enroll under the same agreement, so organizations can leverage their purchasing power. Contract Option offers customers the flexibility to forecast their technology requirements over a two-year period, which provides the benefit of volume discounts, future releases, and optional support.

Contract Option Details

  • Two-year, point-based forecast option

  • Signed agreement, contract required

  • Price band level dictated by customer two-year forecast, available on day one

  • Milestones
    • Required to order 15% of forecasted volume at Agreement start date

    • 50% of forecast attainment due at first 12 month anniversary from agreement activation date
  • Six price band levels C -- H, exclusive part numbers and prices
    • C = 1,000 points
    • D = 2,500 points
    • E = 5,000 points
    • F = 10,000 points
    • G = 25,000 points
    • H = 50,000 points
  • All products and services carry point values, except Media and Documentation Packs

  • Minimum entry: 1,000 points

  • Unlimited number of additional sites can leverage purchasing power

  • Allowed to install and report usage within 30 days, once Agreement is signed
Software Subscription
  • Available up to one or two anniversary dates

  • Sold as use authorization with Software Subscription

  • Also available as use authorization with Software Subscription and Support

  • No use authorization only option available (except for products that offer a single use authorization upgrade in lieu of Software Subscription)

  • Customer can also acquire Software Subscription and Support for existing programs

  • Renewals are based upon agreement anniversary date, no proration

  • Allows you to keep up-to-date with the most current releases and versions of eligible products
Customer Support
  • Acquired on a use authorization basis

  • Number of Designated Callers set by price band level; additional designated callers are available for a fee

  • Distribution of Designated Callers managed by sponsoring technical contact, which is defined by originating site

  • Entitlement to support is based upon specific products enrolled

  • Product support coverage for a site
    • Support must be acquired for all existing products at a site. All future copies of that product acquired must also include Support. Support must also be acquired for all copies at all sites of selected products which are managed by a centralized support function.
Deliverables
  • Welcome kit with exclusive agreement number

  • Passport Advantage Proof of Entitlement certificates

  • Media delivered to Software Subscription customers upon the availability of a new version or release

  • Documentation and Media Packs sold separately. No point value or aggregation under Passport Advantage

  • Contract Option Pricing and Part number information
Process Overview: An IBM Lotus Passport Advantage authorized representative determines the SVP level based on the customer's two-year acquisition forecast.

A Passport Advantage Agreement is prepared by the IBM Lotus Passport Advantage authorized representative who quotes final pricing based on the customer's determined SVP level.

Each customer site must designate a Reseller to manage its Passport Advantage business. After the initial three months of the agreement period, the site may change its selected partner at any time with a 30 days' notice to Lotus.

The customer signs two copies of the Passport Advantage Agreement (and Support Enrollment Form, if applicable), which are forwarded to Lotus.

Lotus signs the Passport Advantage Agreement and assigns a unique Passport Advantage Number for the customer. One copy of the signed agreement, Passport Advantage Number, and Enrollment Form, is sent to the customer by Lotus.

Additional sites can enroll to acquire software under an existing Passport Advantage Agreement through Enrollment Forms. Each enrolled site will be assigned a unique Passport Advantage Number, which is linked to the organization's original Passport Advantage Number. Each additional site must have one contact who has the authority to issue purchase orders for all acquisitions by that site.

Customers acquire against their agreement by placing orders with their authorized IBM Lotus representative, referring to the unique Passport Advantage Agreement number,

Installation, Software Subscription, and Support Proof of Entitlement certificates are sent to each customer site for each order processed summarizing the prior month's acquisition activity. The certificate provides compliance confirmation to the customer for all acquisitions. The certificate includes the contact name and address listed on the Enrollment Form for that Passport Advantage number.

Complete Enterprise Option (CEO): The Complete Enterprise Option (CEO) with Software Subscription and Support offering is for those customers who manage a mixed computing environment and who have chosen a total IBM and/or Lotus solution. Customers willing to make a long-term commitment to IBM and Lotus software will benefit not only from a total lower cost of ownership, but also from ease of deployment, migration, and managing technology changes. CEO customers sign a two-year agreement to acquire a category of IBM and Lotus products based on the number of users in your enterprise. Software Subscription and Support for the first year are included in the per user pricing, so customers always have the most up-to-date versions of IBM and/or Lotus software and technical support for each user.

Complete Enterprise Option (CEO) Details: Two-year agreement with six SVP levels (number of users)

  • C = 500

  • D = 2,000

  • E = 5,000

  • F = 10,000

  • G = 15,000

  • H = 25,000

  • Customers with a minimum of 500 users must commit to running IBM/Lotus solutions

  • Customers choose a category of products to acquire for the entire user population
Product Categories
  • Business Applications

  • Lotus Communications

  • Business Intelligence

  • Working Together (R): Includes Business Applications and Lotus Communications

  • Host Communications: Includes Lotus Communications

  • Distributed Intelligence: Includes Business Intelligence and Host Communications

  • Integrated Office: Includes Host Communications

  • Enterprise Integration: Includes Integrated Office

  • Complete Enterprise Solution
A user may use any or all of the programs included in the chosen Product Category. Only one Product Category may be selected. Upon signing the Passport Advantage Agreement, you must acquire the selected Product Category for all of your Users. We may add products to any Product Category, in which event you may acquire such additional products for an additional fee.

Products not included in the customers' selected CEO product category may be acquired from the VPO/CO price list at their CEO agreement level.

Software Subscription

  • Software Subscription and Support coverage to the first anniversary is automatically included in the per user pricing for each CEO Product category

  • Software Subscription gives you the right, for the coverage period acquired, to the most current version, release, update or upgrade to eligible Programs acquired under the Passport Advantage Agreement or previously installed. We do not guarantee that new versions, releases, updates or upgrades will be made available during your coverage period.
Customer Support: Software Subscription and Support coverage to the first anniversary is included in the per user pricing for each CEO Product category.
  • The option to select any product category supported within a geography and receive subscription and support for products in that product category. All users must be covered.
Deliverables
  • Welcome Kit with exclusive agreement number

  • Passport Advantage Proof of Entitlement certificates

  • Documentation and Media Packs sold separately. No point value or aggregation under Passport Advantage

  • Complete Enterprise Option Pricing and Part Number information
Process Overview
  • The customer determines the total number of users (minimum of 500 users) who will run IBM Lotus offerings during the two year contractual period, and chooses a Complete Enterprise Option product category.

  • An IBM Lotus authorized representative sets the suggested volume price level (SVP Level) based on the total number of users (the user commitment).

  • The Passport Advantage Agreement is prepared by the Reseller or an IBM Lotus Representative. Each customer site must designate one Reseller to manage their Passport Advantage orders. After the initial three months of the contract period, the Site may change its selected Reseller at any time with 30 days' advance notice to IBM Lotus.

  • The customer determines which sites can purchase through the Agreement, and fills out the Authorized Additional Site Schedule.

  • The customer signs the Passport Advantage Agreement (including Authorized Additional Site Schedule, Enrollment Form for the Originating Site, Support Enrollment Form) and forwards it to IBM Lotus.

  • IBM Lotus signs the Passport Advantage Agreement, assigns a unique Passport Advantage Number and forwards one copy of the signed Agreement and Passport Advantage Number to the customer.

  • Customers place an order (or orders) to their designated Reseller for the total user commitment.
    • The order quantity is required at contract execution

    • The order may consist of more than one Purchase Order (PO).
  • The Reseller submits the Purchase Orders to the Distributor or to IBM Lotus within five business days after receipt from the customer.

  • Installation, Software Subscription and Proof of Entitlement Support Certificates are sent to the customer as soon as the order is processed. These certificates provide compliance confirmation to the customer for all acquisitions.

  • Additional Sites submit Enrollment Forms to IBM Lotus prior to purchase activity. Sites must be listed on the Authorized Additional Site Schedule prior to enrolling. Each enrolled Site is assigned a unique Passport Advantage Number, which is linked to the organization's original Passport Advantage Number.

  • Customers may purchase additional users (or other Passport Advantage offerings) by placing a purchase order with their designated Reseller referencing their Passport Advantage Number.

  • Software may be installed anytime after contract execution. The Reseller must submit a purchase order to Lotus for all users within five business days of receiving the customer's purchase order.

  • Software Subscription and Support coverage must be renewed annually for all users acquired, and for acquisitions from the VPO/CO price list during the previous contract year. Customers will be sent a detailed notification of all their acquisitions at least 30 days prior to their Software Subscription renewal date.



Migration Plans

Effective April 28, 1998, no new IBM Software Advantage, Strategic Account Offering (SAO) or Lotus Passport agreements may be offered and no new products will be added to the eligible product list of any of these offerings.

Current Passport-only enrollments will be transitioned into Passport Advantage at the same SVP level.

  • VPO to Passport Advantage VPO
  • CO to Passport Advantage CO
  • CEO to Passport Advantage CEO
Current Advantage customers can either continue acquiring under their Advantage Agreement (until earlier of the expiration of Agreement or March 31, 1999), migrate to Passport Advantage, or start a Passport Advantage Agreement in parallel.

Letters will be sent to all current customers stating what has changed and how it affects them. Transition letters, per option, will be sent to current Passport-only customers. Software Advantage-only and joint customers will receive a letter detailing the options available to them.

Note: Advantage customers with existing Upgrade Protection entitlements will continue to have their entitlements honored until the end of their contract period.

Passport VPO to Passport Advantage VPO

  • Only SVP Levels A,B and C are available
    • Level D-H customers will be re-leveled to C but will have the option to migrate to CO if they forecast 1,000 points or more.
  • Software Subscription coverage is now only available in 12 month or 24 month "blocks" of time

  • Software Subscription renewal is now on a transaction basis
    • Customers may renew at the time each line item expires

    • There will be one more "back-end" proration for those with an Anniversary Date on or before July 1998 (because renewal notifications are done 60 days prior to the Anniversary Date)
Passport CO to Passport Advantage CO
  • For most products, Software Subscription is included in the use authorization price until the next Anniversary Date (no proration of fee). Issues concerning this change will include:
    • Customers who have been acquiring maintenance will see a change to renewal costs. They will have a lower cost with use authorization, but will now always have 12 months for coverage.

    • Customers who have not been acquiring maintenance will now incur a higher price
  • For those products where Software Subscription is not included in the offering, use authorization upgrade part numbers are issued if and when a use authorization upgrade is released.

  • Level A & B pricing within the Passport Advantage CO, will no longer exist so customers will be releveled to C until the end of their forecast period.
Passport CEO to Passport Advantage CEO
  • Nine product categories where user pricing includes Lotus and IBM programs, Software Subscription and Support

  • CEO is no longer a forecast-type option
General Migration Terms for Advantage Only Customers

Effective April 28, 1998:

  • No new Advantage Agreements

  • Frozen eligible product list, meaning no new products, versions or releases will be added. Existing products may be withdrawn from marketing

  • Renewal Agreements will be Passport Advantage as Advantage ceases to exist on the above date
    • Customers with end dates prior to August 31, 1998 may request an Advantage renewal
      • Standard Advantage renewal terms will apply, promotional incentives will not apply
  • Transition period through March 31, 1999
    • Advantage customers may migrate to Passport Advantage

    • Prior to migration to Passport Advantage, Advantage terms will be honored

    • A new Passport Advantage Agreement may be started in parallel

    • Effective April 1, 1999, Advantage terms will be replaced by Passport Advantage terms for any remaining agreements
Advantage Conversion Table: Advantage discount levels to Passport Advantage SVP price levels:
Advantage Discount Level                      PA SVP Price Level

20% D 25% E 30% F 35% G 40% H 45% I*

*     Unpublished price level

Advantage-Only Customers Continuing on Advantage Agreement: Advantage-only customers who want to continue on their Advantage Agreement, may do so until the earlier of the end date of their Advantage Agreement or March 31, 1999.

If customers initiate a parallel Passport Advantage Agreement, the second anniversary date will correspond to their Advantage end date. The price level will be based on a conversion to a SVP price level equivalent to their discount under the Advantage Agreement.

If contract to-date acquired SRP revenue/200 (point conversion) crosses a Passport Advantage price level, then we will honor the better price level. Point value of contract to-date Advantage acquired SRP revenue/200 will be credited towards the Passport Advantage Agreement (included in tracking earned Point activity). Advantage activity after the start of Passport Advantage will count towards Passport Advantage (SRP/200) calculated on a periodic basis. Note that Passport Advantage activity will NOT aggregate towards Advantage. The "200" is based on a U.S. dollar value. Each country will translate at the Passport Advantage Exchange Rate for the local currency. The second anniversary date is equal to the Advantage contract end date. All acquisitions under the Passport Advantage Agreement will be aggregated towards improved Price Levels.

Advantage-Only Customers Migrating to Passport Advantage: Advantage-only customers who want to migrate to Passport Advantage must do so before migrate prior to the expiration of their Advantage Agreement expires. Once the migration has occurred, the Advantage Agreement is terminated. Any remaining UPO coverage will be carried forward into the Passport Advantage Agreement as Software Subscription.

Price levels will be based on a conversion to a Price Level equivalent to their discount under their Advantage Agreement. If contract to-date acquired SRP revenue/200 (point conversion) crosses a Passport Advantage Price Level, then we will honor the better Price Level. Point value of contract to-date Advantage acquired SRP revenue/200 will be credited towards the Passport Advantage Agreement. Note that all acquisitions under the Passport Advantage Agreement will be aggregated towards improved Price Levels. The "200" is based on a U.S. dollar value.

Joint Customers continuing with Advantage Agreement: Advantage and Passport customers wishing to continue with the Advantage Agreement can do so through the earlier of the end date of their Advantage Agreement or March 31, 1999.

Passport Advantage Price Level will be revised to reflect the better of the Passport Advantage SVP or the SVP equivalent to the discount level of their Advantage Agreement. Advantage contract to-date acquired SRP revenue/200 (point conversions) + Passport Advantage acquired Points assessed. If the total points qualify for a better Passport Advantage Price Level, then IBM will honor the better Price Level. Point value of contract to-date Advantage acquired SRP revenue/200 will be credited towards the Passport Advantage Agreement. All acquisitions under the Passport Advantage Agreement will be aggregated towards improved Price Levels. The "200" is based on a U.S. dollar value. Subsequent Advantage acquisitions after the start of Passport Advantage will count towards Passport Advantage (SRP/200) calculated on a periodic basis. If the Advantage end date is greater than the Passport end date, the second anniversary is set to the Advantage end date.

Joint Customers migrating to Passport Advantage: Advantage and Passport customers wishing to migrate to the Passport Advantage Agreement must do so before the Advantage Agreement expires. Upon migration, the Advantage Agreement will be terminated. Any remaining UPO coverage carried forward into Passport Advantage will be as Software Subscription.

Passport Advantage Price Level will be revised to reflect the better of the Passport Advantage SVP or the SVP equivalent to the discount level of their Advantage Agreement. Advantage Contract to Date acquired SRP revenue/200 (point conversions) + Passport Advantage acquired Points assessed. If the total points qualify for a better Passport Advantage Price Level, then IBM will honor the better Price Level. Point value of Contract to Date Advantage acquired SRP revenue/200 will be credited towards the Passport Advantage Agreement. All acquisitions under the Passport Advantage Agreement will be aggregated towards improved Price Levels. The "200" is based on a U.S. dollar value. If the Advantage end date is greater than the Passport end date, the second anniversary is set to the Advantage end date.



Year 2000

This product does not have date dependencies and is, therefore, Year 2000 ready.



OFFERING POSITIONING

Passport Advantage has been designed with three options to meet the needs of all who require Lotus and IBM workstation software. These options accommodate a broad range of sizes and needs -- from small businesses or pilot implementations to multi-national enterprise-wide deployment. Customers currently participating in IBM Software Advantage, Strategic Account Offering and/or Lotus Passport are encouraged to enroll in Passport Advantage today.



STATEMENT OF GENERAL DIRECTION

Today's announcement focuses on IBM and Lotus' strategy for using volume licensing programs to provide customers with a SINGLE OFFERING which:

  • Includes
    • Most IBM products currently on the IBM Software Advantage eligible product list -- Z125-5361-28

    • All Lotus products currently under Passport

    • IBM and Lotus support
  • Sets direction for additional product inclusion

  • Establishes a base to ensure a single face, message, and strategy to our customers



REFERENCE INFORMATION

For additional Passport Advantage Resources, access:

Trademarks
      MQ is a trademark of International Business Machines
      Corporation in the United States or other countries or both.
      Lotus Passport is a trademark of Lotus Development Corporation.
      Lotus and Working Together are registered trademarks of Lotus
      Development Corporation.
      Other company, product, and service names may be trademarks or
      service marks of others.

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