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August 20, 2002

Net One Systems and IBM Japan to Form Joint Venture in Growth Field
- Providing Storage Networking Solutions -

　Net One Systems Co., Ltd. (head office: Shinagawa-ku, Tokyo; president & CEO: Kazuo Sato) and IBM Japan, Ltd. (head office: Minato-ku, Tokyo; president: Takuma Otoshi) will establish as of September 2, 2002 a joint venture for providing integrated storage networking solutions. Called ProStorage Co., Ltd., the new company will begin business activities on the same date. Net One Systems will invest 65% of ProStorage's capital of 200 million yen; IBM Japan will invest 35%. Osamu Sawada will be appointed president of the joint venture.

ProStorage will propose solutions with high added value while aiming to gain a foothold early in the market of IP-based storage area networks (IP-SAN*), which has a strong affinity with the currently popular TCP/IP networks and is expected to grow rapidly in the future. By combining the technologies and know-how of Net One Systems and IBM Japan and optimally integrating the products from both companies to meet customer needs, ProStorage will develop and offer advanced, practical storage networking solutions that feature both high performance and reliability.

A leading company in the networking field, Net One Systems views storage as "a network infrastructure for efficient data sharing and exchange between applications." In order to expand its IP-based network solutions that have already been widely accepted for their technologies and know-how, it entered the storage market in June 2002 with the introduction of utility storage products from 3PARdata, Inc. of the U.S. With the establishment of ProStorage, Net One Systems will quickly offer services specializing in the network storage market and strengthen its organization to make is possible to provide high added-value solutions regarding networking infrastructures in all fields on a one-stop basis.

IBM Japan currently provides a wide range of storage products, including disk products supporting the Fiber Channel SAN*, IP network storage products (such as NAS* and iSCSI*), gateway products integrating SAN and NAS, and tape products for data backups (such as LTO*). The company has strengthened its product lineup with the introduction of two new products in August 2002: the Model 800 as part of the SAN-bound major product ESS and TotalStorage NAS 100 as part of the group of NAS products to be linked to IP networks. On August 7, IBM Japan also launched the IBM Network Storage Service, a total support service from current status analysis to building, operation and maintenance for customers building storage area networks. By positioning ProStorage as a new sales channel capable of providing its storage products and services not only to users of IBM-servers but users of non-IBM servers, IBM Japan will provide a larger number of customers with IBM's wide range of products and services and hence expand its network storage business.

With the establishment of ProStorage, one-stop service with higher customer satisfaction levels will become possible through building more integrated solutions in the network-based storage field.

* SAN: Storage Area Network, a network dedicated to storage only.
* IP-SAN: A storage-only network build using an IP (Internet Protocol) network.
* NAS: Network Attached Storage, a type of storage connectable to a network.
* iSCSI: A type of SCSI-command-compatible storage connected via an IP network.
* LTO: Linear Tape-Open, the latest standard in magnetic tapes.

■Outline of New Company

1. Company name: ProStorage Co., Ltd.
2. Address: 2-2-8 Sphere Tower Tennoz, Shinagawa-ku, Tokyo
3. Establishment: September 2, 2002 (planned)
4. Capitalization: 200 million yen
5. Investment ratio: Net One Systems Co., Ltd. (65%); IBM Japan, Ltd. (35%)
6. Representative: President & CEO, Osamu Sawada
7. Profile of President: Date of birth: Dec. 7, 1945 (Age: 56)
   　 Place of Birth:Chiba Prefecture, Japan
   　 Education: March 1968 Graduated Kwansei Gakuin, School of Economics
   　 Work Experience:
   　　 June 1998 Senior Counselor, Information Industry Group, Mitsubishi Corp.
   　　 July 1998 President & CEO, IT Commerce Corp.
   　　 April 2000 Retired from Mitsubishi Corp.
   　　 April 2000 Vice president (in-service) Neoteny Co., Ltd.
   　　 September 2002 To assume position as director and vice president of ProStorage Co., Ltd.
8. Number of employees 16 (planned)
9. Operations Purchasing, sales and consulting of storage and network products and related devices and software as well as provision of maintenance services and the like
10. Products handled Storage and network products and other related products including software from both IBM Japan and Net One Systems
11. Target market Data centers, telecommunications carriers, companies related to electric power, broadcast operators, financial institutions, major companies, governmental bodies, medical institutions, research facilities, schools, as well as mid-sized businesses that can expect major demand in the future.
12. Start of Operations: September 2, 2002 (planned)

IBM, Enterprise Storage Server and TotalStorage are trademarks of IBM Corporation.
Linear Tape-Open and LTO are trademarks of the Hewlett-Packard Company, IBM Corporation and Seagate Technology, Inc. 3PARdata is a trademark of 3PARdata, Inc. Other company names and products are trademarks or registered trademarks of their respective companies.