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OS/2 2.0 QUESTIONS & ANSWERS

March 31, 1992

General

Q1: Can I walk into a local software retailer today and
purchase OS/2 2.0?

A1: Our goal is to make OS/2 2.0 available everywhere DOS is
available and will be widely available on dealer shelves
toward the end of April. If a customer's remarketer does
not yet have the product in stock, it will be available
through an 800# where IBM is taking direct orders.

Q2: When will Windows 3.1 code be included in OS/2 2.0? Will
you issue another release?

A2: As you know, we have the intellectual property rights
to Windows 3.1 code and are currently running that code
in our lab. We will review the final functionality of
Windows 3.1 and base any feature updates on what our
customers require.

Q3: IBM has always said it will not sacrifice product
quality to meet a delivery date. Is today's product of
the highest possible quality or is it a buggy product
that has been released to meet your set delivery date?

A3: OS/2 is at a superior quality level. We believe we are
delivering a world class product to our customers, one
which for the first time exploits the power of 32-bit
Intel-based systems.

Q4: Now that the 32-bit graphics engine will not be
included in the GA version of OS/2 2.0, is the product
a true 32-bit operating system?

A4: We are shipping a full-function 32-bit operating system
with a hybrid graphics engine. It will support both
32-bit and 16-bit graphics applications. As work
continues, we will enhance 32-bit graphics support as
part of our OS/2 product updates.

Q5: When will the full 32-bit GRE be available?

A5: We are delivering all the function at GA. Any
additional 32-bit graphics technology would be provided
as part of our regular product updates.

Q6: How many copies of OS/2 2.0 do you expect to sell by
year end '92?

A6: Currently, we have more than 1 million OS/2 licenses
and each of those users will receive a free upgrade to OS/2
2.0. We expect to sell numbers in the millions.

Q7: How many free copies of OS/2 2.0 have you been giving
away today?

A7: Just enough for appropriate merchandising. As with any new
software introduction, a portion of not-for-sale (NSF)
copies are allocated for use by you, the press, as well as
by consultants, analysts and user groups and by our dealers,
to name a few.

Q8: Will these not-for-sale (freebies) be included in your
OS/2-installed base figures?

A8: We will report unit shipments, just like the rest of the
industry.

Q9: How is IBM planning to measure the success of OS/2 2.0 in
the short-term? Long term?

A9: We use profitability, marketing share and customer
satisfaction.

Q10: How soon will you have another version or release of
OS/2?

A10: We do not anticipate that a new version of OS/2 will be
required for some time. Rather, we will continue to enhance
OS/2 2.0 over time by providing regular product
enhancements.

Pricing

Q11: Will you offer an introductory price for OS/2 2.0?

A11: Yes. Through July 31, Windows users can buy OS/2 2.0
for $49.00; any DOS user can upgrade for $99.00 and new
purchasers can buy OS/2 2.0 for $139.00.

Q12: What about OS/2 1.X users?

A12: All existing OS/2 users can upgrade to 2.0 for free until
July 31.

Q13: What is the process for DOS, Windows and OS/2 upgrades
during promotional period? What proof do I need to provide?

A13: Actual proof of purchase or the original first page of the
operating manual. (More detail to come.)

Marketing

Q14: IBM must have invested heavily in the development of
OS/2 2.0. How much did you spend?

A14: Development costs are proprietary. (Note: If responding to
WSJ article, $2.5 billion was grossly exaggerated.)

Q15: Does IBM expect OS/2 2.0 to be a big revenue producer?

A15: We believe OS/2 2.0 will be a success in the
marketplace.

Q16: Are you looking at different ways of marketing OS/2 2.0
in the channels? For instance, will you be selling it
direct?

A16: Our goal is to make OS/2 available everywhere DOS is
available. We will be selling OS/2 2.0 in ways that
reach our target audiences. Our preferred delivery channel
is through our business partners (retailers and dealers).
However, we will also be selling OS/2 2.0 through catalogs,
800# ordering and IBM direct marketing force.

Q17: How much are you spending altogether in advertising/
promotion?

A17: Our promotional budget is proprietary. However, let me
emphasize that we have established a far-reaching
campaign. In fact, it will be one of our largest worldwide
ad investments for an IBM product this year.

Q18: Will you be doing any TV advertisements?

A18: We have a hard-hitting print effort planned, however, we
are certainly exploring additional media.

Q19: Who is your advertising target audience?

A19: We are targeting our traditional customers as well as
PC end users. We have an aggressive effort aimed at a
comprehensive audience.

ISVs/OEMs

Q20: How many ISV applications are currently ready to run on
OS/2 2.0?

A20: We have more than 1,000 ISVs who have committed to
deliver 32-bit applications by the end of the year.
A substantial number of these applications are slated for
2Q and 3Q.

Q21: Have you funded any of the ISVs development efforts?

A21: We have a handful of joint development agreements -- all
sound business decisions -- which we feel will result in a
satisfactory return to IBM. We are not "bankrolling"
anyone.

Q22: How does your OEM arrangement work?

A22: As part of IBM's intention to support OEM 386 or 486 PC
platforms, the company will work with all users who may
experience compatibility issues in their first three months
of use and, if a resolution is not possible, the user will
be reimbursed for the cost of OS/2 2.0.

IBM also intends to offer IBM OS/2 2.0, Extended Services
for OS/2, LAN Server 2.0 and Toolkits to OEMs that want to
deliver the new software with their personal computers.

Q23: Do you think you'll be successful in getting OEMs to
pre-load OS/2 2.0 on their systems?

A23: Yes. IBM's intent is to support all 386 and above machines
that are PC compatible. As such, we are testing hundreds of
OEM machines to insure that OS/2 2.0 will work. IBM
maintains a list of supported OEM machine models which will
be periodically updated as more machines are tested for OS/2
compatibility.

At present, OS/2 has been tested successfully on most of the
major PC brands, including: Compaq, Tandy, Dell, AST,
Zenith, Packard Bell, Epson, Toshiba and over 30 others.

Q24: Of your beta customers how many have committed to purchasing
2.0?

A24: Response from beta users has been overwhelmingly positive.
Many are OS/2 1.3 customers already and therefore will
receive a free upgrade to 2.0. Our Limited Availability
(LA) customers have made significant purchase commitments to
OS/2 2.0.

Networking

Q25: When will LAN Server 2.0 be generally available?

A25: OS/2 LAN Server 2.0 will be available on April 10.

Q26: What is IBM's LAN strategy for OS/2 -- in terms of LAN
Server, database and communications server
capabilities?

A26: OS/2 is an industrial strength platform designed to provide
PC users with the broadest choices in the industry today for
networking in small, intermediate and large businesses.
IBM's networking strategy for OS/2 begins with the base
operating system itself -- with its LAN-aware shell and
multitasking capabilities so suitable for taking advantage
of rich network resources.

LAN Server 2.0 combines industry-leading function for OS/2,
DOS and Windows clients in terms of administering LAN
resources, such as applications, files and print.

Extended Services offers a powerful LAN client/server
database option (DDCS) that allows DOS, OS/2 and Windows
clients to tap into much larger network databases through a
single server on a LAN.

Q27: LAN Server has been viewed as a poor performer. What
are the number of LAN Servers running on OS/2 2.0?

A27: We have run additional testing to show that the performance
of LAN Server 2.0 is 2.5 times faster than LAN Server 1.3,
depending on workload characteristics. It is extremely
competitive in OS/2 environments.

Q28: How does IBM expect to exert leadership with OS/2 as a
networking platform without TCP/IP support?

A28: OS/2 2.0 has very strong TCP/IP internetworking capabilities
through TCP/IP Version 1.2 for OS/2 2.0 clients. (TCP/IP
Version 2.0 supports DOS and Windows users.) TCP/IP Version
1.2 provides OS/2 PCs with both client and server access to
AIX and UNIX workstations, as well as to X.25 packet
switching wide area networks and to X-windows engineering
graphics.

Q29: How many clients can be maintained at one time with LAN
Server 2.0?

A29: There is no limit to clients on a single server, however, a
reasonable maximum would be the Token-Ring standard of 260
clients per server on a ring.

Q30: How does OS/2 work with NetView?

A30: OS/2 sends alerts to NetView through its communications
manager capability, now a part of Extended Services. These
alerts will be enhanced over time but focus today on
problems arising in network communication and in resource
sharing. LAN Management Utilities/2 provides NetView with
information on LAN utilization and configuration and helps
NetView perform functions such as server recovery.

Q31: I've heard from early customers that installing
Extended Services is a mammoth undertaking. Is this
true? Will you fix it?

A31: While IBM views Extended Services installability as
acceptable today, never the less it will continue to hone
the install procedure making it easier for end users for the
future.
Q32: How does your recent networking announcement on APPN affect
OS/2 2.0?

A32: OS/2 2.0 provides high performance in APPN support through
Extended Services. Advanced-Peer-to-Peer Networking, or
APPN, is an industry-leading networking infrastructure for
client/server distributed application -- providing great
flexibility for network reconfigurations as well as
robustness for the high bandwidth transmissions.

Taligent/PINK

Q33: With the formation of Taligent, is IBM still committed
to OS/2 2.0?

A33: Yes. We plan to protect our customers' investment in
OS/2 by providing OS/2 application support in the new
object oriented environment should our customers
desire to move to that environment.

Q34: Should I just wait for Taligent and continue writing
Windows applications?

A34: Absolutely not. You're missing a great opportunity if you
don't exploit the capabilities of OS/2 2.0 now. The
application benefits you can achieve today with OS/2 2.0 far
surpass what can be gained by other existing 32-bit
Intel-based operating systems.

Q35: What stages will take place in a transition from OS/2
to Taligent? What guidance would you give developers
today?

A35: OS/2 will continue to be enhanced in the '90s.
Extensions to support multimedia, pen and tablet based
applications distributed computing (e.g., DCE) will be
added. Portability to non-Intel platforms is also planned
as is the ability to run OS/2 applications within the
Taligent environment.

Microsoft/Windows 3.1

Q36: Bill Gates was quoted recently as saying that
concerning OS/2 2.0, IBM "may have promised more than
[it] can deliver." Is he correct and can you deliver a
better Windows than Windows?

A36: We are fully confident that we will be delivering
everything that was promised for OS/2 2.0. First of
all, this system contains much more functionality than
was outlined in April 1991. In fact the performance we
detailed at that time was met in our LA code last
December. Secondly, IBM is delivering what its customers
and ISVs have asked for -- a more crash-protected
environment under 2.0.

Q37: Do you view Microsoft as a direct competitor in the OS
arena?

A37: Absolutely. We are direct competitors in operating systems
for the desktop. On the applications side, our strategy is
inclusive. We want to embrace users of DOS and Windows
programs and have them run these applications in a more
stable environment -- OS/2.

Q38: Will you incorporate NT technology into OS/2?

A38: NT is not a currently available product. We have the rights
to NT technology. However, most of the function that NT
will have is in OS/2 2.0. We bring that function to OS/2
2.0 users today whereas NT is due sometime in 1993.

Enterprise

Q39: What is the role of OS/2 2.0 in an enterprise
environment?

A39: OS/2 2.0 provides an industrial strength operating
system platform that provides the user with single
workstation access to personal productivity
applications, LAN based workgroup applications, and
host-based enterprise applications. In essence, OS/2
2.0 provides the user with an entree into the total
enterprise. OS/2 2.0 also provides a high performance
platform for LAN server applications.

Q40: How does OS/2 2.0 support SAA applications?

A40: OS/2 2.0 is the most advanced open workstation
environment. The OS/2 2.0 workplace shell conforms to
the '91 object-oriented user interface. OS/2
2.0 also enables customer or vendor developed CUA '91
applications. With the addition of OS/2 Extended
Services, OS/2 2.0 provides an SAA conforming
relational database manager and extensive SAA CCS local
area network and wide area communications connectivity.
SAA CPI programming languages and services are
supported on OS/2 2.0 with selected compilers offering
32-bit support. OS/2 2.0 also provides the workstation
base for SAA cooperative applications.

Q41: How does OS/2 2.0 participate in an open systems
environment?

A41: OS/2 2.0 with OS/2 Extended Services and/or OS/2 LAN
Server offers a wide variety of industry and
international standards for both client/server and wide
area network environments. This allows customers to
incorporate OS/2 based workstations and servers in a
broad range of multi-vendor system environments.

Q42: OS/2 Extended Edition had been designated as the SAA
workstation environment? What is the impact of the
repackaging of OS/2?

A42: OS/2 2.0 with OS/2 Extended Services 1.0 (ES) is the
successor to OS/2 EE except it doesn't include OS/2 LAN
Requester. The combination of both programs provides the
full complement of SAA function. Distributed Data
Connection Services/2 (DDCS/2) is required on a workstation
client or LAN server to access remote SAA host-based
relational database managers.

Q43: The OS/2 Workplace Shell differs in some respects with
the CUA guidelines? Do you plan to correct these
differences?

A43: While there are some minor differences, the OS/2 2.0
Workplace Shell is CUA compliant. CUA is a set of
guidelines for both environments and applications alike.
The Workplace Shell, an implementation of the CUA
architecture, provides a platform which allows users to run
existing applications, while providing significant potential
for future object oriented applications.

The OS/2 Workplace Shell and CUA will both evolve over time.
Customer experience will be a key factor. IBM will continue
to ensure the highest degree of consistency possible, while
providing the most usable solution for our customers.
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