Today's flatter, interconnected world offers unprecedented opportunities for entrepreneurs

and other small businesses. Now even the smallest of start-ups, in the least-developed
markets, can have the whole world as its marketplace.

IBM is dedicated to helping entrepreneurs around the world compete in today's global
economy—and nowhere is the notion of "global entrepreneurship" more compelling than in
the world's emerging economies. Also known as "growth markets," these developing regions
represent 85 percent of the world's population and comprise 60 percent of the world's IT
growth.

As part of its international growth strategy, IBM is tapping into the enormous business
opportunities and fast-growing consumer populations in emerging markets. By collaborating
with Business Partners, independent software vendors (ISVs) and venture capitalists, IBM is
able to break into these new markets early on, provide local entrepreneurs with the building
blocks for success—and help them thrive.

IBM's business in some of the earliest emerging markets—specifically Brazil, Russia, India
and China—collectively grew 26 percent last year. These so-called BRIC countries are part
of IBM's growth markets organization of more than 100 countries. In 2007, revenue in each
of 50 of those countries, including Mexico, Egypt and Vietnam, grew more than 10 percent
and collectively grew more than 20 percent. With a focus on the next tier of emerging
markets, including Latin America, Eastern Europe and Sub-Saharan Africa, there's vast new
opportunity for growth—and for IBM to empower global entrepreneurs.

IBM's Business Partners fuel entrepreneurship

IBM's Business Partners deliver the reach and relationships IBM needs to break into
emerging markets and connect with entrepreneurs. Local partners are the face of IBM and the
trusted advisors to the small businesses that dominate these economies—and they play a vital
role generating demand and driving sales of IBM solutions.

Tallard Technologies, an international distributor of state of the art computing and

telecommunications solutions, has been an IBM Business Partner for nine years. A subsidiary
of Brazil-based Itautec Group, Tallard and IBM work together in six Latin American
countries (including Mexico, Argentina, Venezuela, Chile and Ecuador), which represent
more than 90 percent of this emerging market, said Humberto Gonzalez, Tallard's President
and CEO.

As a result of standardized business solutions, open architecture and increased

communication, local solution providers across Latin America have recognized the
opportunity that lies beyond their borders. IBM and Tallard constantly seek out such
entrepreneurs to assist them in marketing their offerings abroad.

Recently, for instance, Tallard and IBM helped a medium-sized system integrator in
Venezuela expand to Mexico, where the firm has used Tallard resources to help close several
important projects migrating Sun servers to IBM Power systems.

"Most importantly, Tallard and IBM provide start-ups with market intelligence and initial
demand generation in order to accelerate revenue and reduce start-up losses," Gonzalez said.
Software developers: the entrepreneurs' entrepreneurs

Independent software vendors (ISVs) provide a key route to market for IBM in emerging
economies—and a great opportunity for IBM to vigorously support entrepreneurs.

De Meyer Konchev (Pty), Ltd. (DMK), a software development company based in

Johannesburg South Africa, works closely with IBM to succeed at home and fulfill its global
ambitions. The 21-person firm, which had a former life as a successful SAP implementation
company, began marketing its own retail-specific enterprise resource planning (ERP) solution
in January 2007—and already has a global expansion strategy in place.

To date, IBM has connected DMK with three IBM Business Partners with retail expertise in
Canada—and initial discussions with retailers, via these partners, has garnered significant
interest in the DMK ERP Retail Solution. DMK plans to enter the U.S. market after
establishing a foothold in Canada, and also has Asia in its sights.

"Frankly, without IBM, we would not be able to consider a global approach so early in our
corporate cycle," said Jaco Claassens, DMK managing director.

Within South Africa, IBM has brought DMK directly in touch with its target market and
provides infrastructure, technical support, facilities for training and meetings and other
resources crucial to success. Teaming with IBM enables DMK to compete on equal footing
with its main competitors—global giants like SAP, Microsoft and Oracle.

"We believe that we have a great solution that we can grow into the first choice retail solution
anywhere in the world," Claassens said. Much of that growth will come from teaming with
IBM, driven by the credibility that such a partnership provides, he said.

Capital for new ventures, new technology

In China, perhaps the greatest emerging market, IBM's Venture Capital Group works closely
with Gobi Partners, a Shanghai-based venture capital firm that invests in the IT sector,
especially digital media start-ups. IBM, in fact, is a longtime investor in Gobi, which has
funded over 20 start-ups in China since its inception in 2002.

"IBM was our first, big strategic limited partner—basically an anchor investor for the Gobi
Fund," said Thomas Tsao, a partner at Gobi Partners. In large part, Gobi serves as a filter for
IBM in the immense Chinese market, weeding through countless new technology ideas and
business opportunities. When Gobi determines a good investment, IBM can get in on the
ground floor.

Digital Media Group (DMG) provides a prime example of how, working intimately with a
venture capital firm like Gobi, IBM empowers entrepreneurs and grows with them. In 2004,
Gobi invested in the start-up—then a small, Shanghai-based company that offered a
passenger information system. Today, DMG operates a network of TV screens inside subway
stations and cars across nine cities in China, reaching over 13 million passengers a day. DMG
has over 200 employees, doubled its revenue in the past year, and is looking to expand
globally.
IBM has stood alongside DMG from the very start—when Gobi called in IBM experts to
conduct due diligence on DMG's innovative technology. IBM liked what it saw, helped
brainstorm next steps—and today customized IBM servers underlie and control the entire
DMG network.

DMG's affiliation with IBM and use of IBM technology was the stamp of approval that won
the company its initial contract with the transportation authorities in China—and has helped it
win contracts in other Chinese cities since, Tsao said.

"Now we're in discussions with IBM to bundle our solution and work with IBM's
transportation group to take it to other emerging markets—where subways are going to be
such an important part of the solution to reduce air pollution and traffic congestion," Tsao
said.

A focus on entrepreneurs

IBM is engaged in other work to support small and start-up businesses. For example, the
company has teamed with the International Financial Corporation (IFC), the private sector
arm of the World Bank, to launch new resources and a Spanish lanuguage version of a free,
Small Business Toolkit specifically for underserved small businesses in the U.S. including
women, Black, Hispanic, Native American, and Asian entrepreneurs. In Brazil, IBM, Banco
Real and the IFC also launched the toolkit for Brazilian entreprenuers. The Toolkits, already
available in 30 different sites and 16 languages provide small-business owners in emerging
markets with highly developed business information, tools, and training services usually
reserved for Fortune 1000 companies.

In addition, IBM is launching the Global Entrepreneurs Exchange—an online exchange to

support small business owners around the world with peer-to-peer advice and mentoring, a
support network, social media and better access to capital, knowledge and expertise.
Specifically designed for the new global entrepreneur and for the many regional planning and
governmental authorities focused on helping them, the Global Entrepreneurs Exchange will
provide:

 Peer-to-peer advice and access to expert mentors, without the constraints of

geography or funding;
 A support network for governmental and non-governmental agencies responsible for
economic development, as well as small global entrepreneurs themselves;
 Innovative social media for collaboration, with global community forums, a business
directory, user surveys, website building and cell-phone access and notification

IBM knows that entrepreneurs are the engines of job creation and growth, which makes them
the most critical player in recharging the global economy. In today's challenging, tumultuous
times, support for entrepreneurs is more crucial than ever.

"I believe IBM is committed to nurturing innovation via entrepreneurs because it's thinking
about the global community at large—which shows IBM's corporate responsibility," said
Thomas Tsao, of Gobi Partners. "Entrepreneurship is good on so many levels—and the fact
that IBM wants to help it flourish in so many markets is really unleashing and empowering
entrepreneurs all over the world, and this is creating great, positive change.”