Jan. 16, 2006

North Carolina State University Announces Services Science Initiative
IBM Helps Develop New Academic Discipline for Services Economy

North Carolina State University and IBM today announced a new curriculum initiative in Services Sciences, Management and Engineering (SSME). The new academic initiative is designed to prepare graduate students for careers in the evolving multidisciplinary field of services management.

NC State, whose motto is ‘Innovation in Action,’ will be the first research university in the U.S. to launch a master’s-level curriculum initiative in SSME, which was created in collaboration with IBM through its Academic Initiative program. In the 1950s, IBM made a similar effort to help establish computer science as a new academic discipline.

The services sector develops and implements technological applications that help businesses,
governments and other organizations improve what they do and tap into completely new areas. It
currently represents over 75 percent of the U.S. economy and is growing rapidly as companies
seize new business opportunities by building more efficient IT systems, streamlining business
processes and embracing the Internet. At IBM alone, services now account for about 50 percent
of the company’s revenue.

“We clearly need to develop a more systematic approach to services innovation if we are to sustain this vital new sector in the economy,” said Paul Horn, senior vice president, IBM Research. “It is critical that we work with universities to create curricula that provide students
entering the workforce with skills and training needed for growing our services business.”

“SSME positions NC State as a worldwide leader in developing the skills that companies like
IBM are looking for in their employees,” said Steve Allen, associate dean for graduate programs
and research at NC State’s College of Management. “Our students will now have a chance to be
part of this emerging field, opening the door for them to pursue a wide variety of services-related
jobs.”

The new program at NC State draws on research and teaching in the fields of computer science,
computer engineering, business strategy, and management sciences to help students develop the skills required in a technology-based, services-led economy.

A team of faculty members from the management and engineering colleges has developed five
new services-related courses that will be added to the graduate-level studies in SSME and Master of Science in Computer Networking (MSCN) programs.

Graduates from both programs will have master’s-level expertise in business processes, business strategy, information technology, and management of people in the workforce. Both colleges will be admitting students for the new curriculum in fall 2006. IBM will also encourage its employees to enroll in the program.

With thousands of technical researchers and business consultants around the world dedicated to services, IBM is in a good position to partner with universities to further develop SSME, providing a perfect breeding ground for testing and developing SSME theories and practices. In
addition, many IBM developers and researchers have collaborations with university researchers
and educators that can help drive new programs and courses and can help establish a new
community around SSME.

“The College of Engineering and IBM have had a long-standing relationship that has benefited
both NC State and IBM. In fact, IBM has remained one of the top employers of our graduates
over the past two decades. At NC State we strive to provide the education and skills students
need to compete in today’s highly competitive market place,” said Dr. Nino A. Masnari, dean of
the College of Engineering.

Two IBM employees -- a Distinguished Engineer, one of the company’s top honors for outstanding technical achievement, and a researcher -- are serving as adjunct faculty members at NC State to help launch and develop the program there, providing direct access to IBM’s
expertise in services and technology as the SSME curriculum continues to develop.

About SSME

Services experts must have a sophisticated understanding of business strategy, business
processes, information technology, and the management of individuals and teams. Combining
the strengths of computer science, computer engineering, and management programs brings
together all of these necessary components. On the research side, while there has been progress within some traditional academic disciplines, most of the big questions will require a broader perspective, which the interdisciplinary SSME curriculum will provide.

Additional collaboration by corporations and universities is anticipated as SSME evolves, leading to greater integration of the varied approaches taken by these disciplines and resulting in a systematic approach to services creation, delivery and measurement.

Disciplines that are in a position to contribute include management, especially accounting,
marketing, negotiations, management science, organization theory, supply chain, and technology management; engineering, including computer science, computer engineering, industrial engineering, and operations research; and the social sciences, including anthropology, economics, and psychology.

About the curriculum

The College of Management’s MBA program has added a new concentration in Services Management. It is offering two tracks, one emphasizing the management of relationships between service providers and their clients and the other emphasizing service innovation. Both
tracks will include an overview course on services management, taught jointly with computer
networking faculty, and a course on consulting, taught by the management faculty.

Students in the relationship management track will take courses in business relationship management, marketing research, and organizational culture that provide essential tools for
effective customer analysis and engagement management.

In the service innovation track, students will study process analysis and design, new service
development, service modeling and other courses that will provide essential tools for successful
innovation in the services arena. The MBA program also offers a number of other courses that
are critical for success in services, including project management, privacy and security, and
supply chain management.

This new concentration will be of interest to those working in or interested in the growing technology services industry. The college expects to develop Executive Programs offerings
based on the new curriculum in the future.

Dr. Yannis Viniotis and Dr. Michael Devetsikiotis in the College of Engineering’s electrical and
computer engineering department, and Dr. Harry Perros, in the computer science department, are leading the effort to add a concentration in Services Engineering in the MSCN program. Students in this track would take the new Services Management course (jointly taught with MBA faculty) as their required business course. They then would take three MBA courses: Management of Technology, Managing People in the High-Tech Environment, and Process Analysis and Design.

The MSCN program also would launch two new technical courses: (1) Architecture and Design
of IT Service Systems and (2) Design and Performance Evaluation of Network Services and
Systems.

The new courses for the MBA and MSCN concentrations in services would be added between
fall 2006 and fall 2007, with the first students graduating from this curriculum in spring 2008.

As part of this new program, faculty in the colleges of engineering and management will also

• Conduct basic and applied research relevant to services
• Support doctoral training in services
• Launch modules for executive education and lifelong learning
• Develop additional master’s-level courses to enrich the curricula
• Create a joint master’s degree program

About IBM’s Academic Initiative

IBM's Academic Initiative, launched in 2004, is an innovative program offering a wide range of
technology education benefits to meet the goals of most colleges and universities. As a partner in this initiative, participating schools receive free access to IBM software, free course material,
training and curriculum development and discounted hardware.

IBM is working with select schools in its Academic Initiative to achieve three key objectives:

• Training an IT workforce to fill the new kinds of jobs that are emerging at IBM and across the
industry;
• Providing the right skills to the next generation of IT workers to ensure they are qualified for
the jobs of tomorrow; and
• Ensuring that universities have the most current, relevant curricula that are geared to the kinds
of jobs that are expected, so schools can be attractive for enrollment, funding and growth.

About IBM

IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. Drawing on resources from across IBM and key Business Partners, IBM offers a wide range of services, solutions and technologies that enable customers, large and small, to take full advantage of the new era of e-business. For more information about IBM, visit www.ibm.com.

Contacts:
Matt Berry
IBM
(914) 945-2895

Anna Rzewnicki
NC State College of Management
(919) 513.4478

Martha Brinson
NC State College of Engineering
(919) 515-3394