UGS and IBM to Provide Product Lifecycle Management to Small and Medium-Sized Businesses (SMBs) Worldwide

IBM-UGS Arm IBM Channel Partners with Teamcenter Express cPDM

FOR RELEASE Monday, January 8, 2007

PLANO, Texas – UGS Corp., a leading global provider of product lifecycle management (PLM) software and services, today announced a new agreement with IBM to support the collaborative product data management (cPDM) requirements of small- to medium-sized businesses (SMBs) on a global basis.

“This agreement is another important step in our strategy of delivering innovative, industry-focused business and technology solutions designed specifically for the SMB market,” said Steve Solazzo, general manager, Mid-Market, IBM. “The combination of IBM Business Partners and UGS leadership products creates a very compelling value proposition for SMB customers looking for open, highly scalable data management solutions.”

“UGS is committed to openness – both in technology and in partnerships,” said John Graham, executive vice president of Global Sales and Services, UGS. “We are excited to make this move with IBM for SMBs.More companies trust UGS to manage their product knowledge than the next three competitors combined.We already create or manage more than 40 percent of the world’s 3D data with our open cPDM technology. Working closely with IBM’s Small, Medium Business, IBM Software Group and IBM’s business partners will extend that leadership.”

The two key pieces of the new agreement are:

• IBM and UGS will jointly market to IBM business partners to sell and support Teamcenter® Express software and services to SMB customers in six countries: the U.S., Canada, France, Germany, Japan and China.
  
  
• Teamcenter Express – the cPDM component of the UGS Velocity Series™ portfolio for the mid-market – can be coupled with a wide variety of computer-aided design (CAD) applications including UGS’ Solid Edge® and NX® as well as CATIA®, Pro/Engineer® Wildfire®, AutoCAD®, Inventor™ and SolidWorks®. Teamcenter Express packages SMB-preconfigured, best practice technology for the machinery, automotive, aerospace and defense industries.
  
  Teamcenter Express is the mid-market configuration of Teamcenter, UGS’ flagship product data management software portfolio. With more than two million licenses in use worldwide, Teamcenter is the world’s most widely used PLM portfolio. Teamcenter is the de facto standard for companies across a wide variety of industries looking to leverage world-class engineering product and process management by enabling the sharing of information and ideas among global partners, suppliers and customers in a highly secure, digital environment.

“We’re excited about this new agreement with IBM that expands our working relationship,” said Graham. “Along with an expanded Teamcenter Express, this partnership further demonstrates our commitment to expand our SMB multi-CAD coverage. IBM business partners now have choices in providing the best technology to meet their customer needs. Teamcenter Express provides an open cPDM product to manage multi-CAD data for IBM customers.”

Open platforms are critical to Global Innovation Networks. UGS and IBM have proven their commitment to open collaboration in recent announcements. IBM recently announced a new, openProduct Development Integration Framework to better link product design and development to core business processesThe framework, combined with business partner PLM applications, allows clients to easily extend design and business collaboration throughout their value chain (see separate release). In addition,UGS reinforced its open business model with the publication of a comprehensive reference to the JT™ format, the PLM industry’s most widely used 3D data format for product visualization and collaboration. (see separate release)

An expanded Teamcenter Express for IBM customers will be available in the first quarter of 2007. For more information, visitwww.ugs.com/partners/ibm.

About IBM

For more information about IBM, visit www.ibm.com.

About UGS
UGS is a leading global provider of product lifecycle management (PLM) software and services with nearly 4 million licensed seats and 46,000 customers worldwide. Headquartered in Plano, Texas, UGS’ vision is to enable a world where organizations and their partners collaborate through global innovation networks to deliver world-class products and services while leveraging UGS’ open enterprise solutions, fulfilling the mission of enabling them to transform their process of innovation.

Note: UGS, JT, NX, Solid Edge, Transforming the process of innovation, Teamcenter and Velocity Series are trademarks or registered trademark of UGS Corp. or its subsidiaries in the United States and in other countries. CATIA is a trademark or registered mark of Dassault Systemes Corporation or its subsidiaries in the United States and in other countries. Pro/Engineer and Wildfire are trademarks or registered marks of Parametric Technology Corporation or its subsidiaries in the United States and in other countries. AutoCAD and Inventor are trademarks or registered marks of Autodesk, Inc. or its subsidiaries in the United States and in other countries. SolidWorks is a trademark or registered mark of SolidWorks Corporation or its subsidiaries in the United States and in other countries. All other trademarks, registered trademarks or service marks belong to their respective holders.

The statements in this news release that are not historical statements, including statements regarding expected benefits of the product or the channel relationship, adoption by customers, continued innovation and other statements identified by forward looking terms such as "may," "will," "expect," "plan," "anticipate" or "project," are forward-looking statements. These statements are subject to numerous risks and uncertainties which could cause actual results to differ materially from such statements, including, among others, risks relating to developments in the PLM industry, competition, failure to innovate, partnering strategy, major design errors or security flaws and intellectual property.UGS has included a discussion of these and other pertinent risk factors in its quarterly report on Form 10-Q for the period ended June 30, 2006 filed with the SEC. UGS disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Primary Contact

Dora Smith

UGS

314 264 8480

dora.smith@ugs.com

Additional Contact(s)

Matt Berry

IBM

914 766 1715

mhberry@us.ibm.com