Administaff - ADMINISTAFF AND IBM ANNOUNCE eBUSINESS ALLIANCE

ADMINISTAFF AND IBM ANNOUNCE eBUSINESS ALLIANCE

New venture includes eCommerce portal; joint marketing of technology, human resource services, consulting

HOUSTON – January 12, 2000 – Administaff, Inc. (NYSE: ASF), a leading Professional Employer Organization (PEO), today announced it has established an eBusiness relationship with IBM (NYSE: IBM) to give small businesses access to the very latest eBusiness services and consulting via the Web. Major elements of the relationship include:

IBM Global Services will collaborate in the construction and management of Administaff’s new business-to-business eCommerce portal, a web site that will deliver a broad range of product and service offerings from best-of-class providers to the premium small business community represented by the Administaff client base.
Administaff will work with IBM Global Services and the IBM Global Small Business Unit to jointly market IBM’s e-business Accelerator and Small Business WebConnections to Administaff’s clients. IBM’s e-business Accelerator is an online consulting tool that includes multiple levels of services designed to help customers make timely, well-informed business decisions about harnessing the Web for their business advantage. Small Business WebConnections provides a single point of contact for all of the hardware, software, service and support small businesses need to fully utilize the power of the Internet.
The companies will exchange content for use in various Internet channels. Administaff’s content will provide information about human resources best practices for small businesses, while IBM’s content will focus on information technology.
The companies will work together to identify and promote additional IBM products and services to Administaff’s client base.
The companies will pursue opportunities for IBM to market Administaff’s personnel management services to IBM’s small and medium-sized clients.

"This relationship with IBM represents a significant step in the expansion of our eBusiness strategy," said Paul J. Sarvadi, Administaff president and chief executive officer. "We believe this agreement will accelerate and enhance the process of developing our new best-of-class provider network. This network is intended to leverage the strength of Administaff’s buying power and business relationships into substantial savings and service enhancements for our clients."

Robert Gault, vice president, IBM Global Services, added, "We are excited about IBM becoming a cornerstone in the development and implementation of an eCommerce program to benefit Administaff and its clients. We are also pleased that IBM’s customers will gain access to Administaff’s human resources expertise through our own Web site."

Administaff expects to unveil the new eCommerce portal near the end of the first quarter of 2000.

Administaff Background

Administaff provides small and medium-sized businesses with a comprehensive Personnel Management System that includes benefits and payroll administration, medical and workers’ compensation insurance programs, personnel records management, employer liability management, employee recruiting and selection, performance management, and training and development services. With 1998 revenues of $1.7 billion, Administaff ranks number 765 on the Fortune 1000 list. The company also was named in 1999 to Fortune magazine’s list of "America’s Most Admired Companies," the Forbes Platinum 400 list of the best-performing big companies in the U.S., and the InformationWeek 500 list as one of the top users of information technology. The company currently has 25 offices in 15 major markets and serves clients and worksite employees throughout the United States. For additional information, visit the company’s web site at www.administaff.com.

About IBM

IBM is the world’s largest information technology company, with 80 years of leadership in helping businesses innovate. IBM offers a wide range of services, solutions, and technologies that enable businesses of all sizes to take full advantage of the new era of e-business. The IBM Global Services unit, with 1998 revenues of approximately $29 billion, is the world’s largest IT services provider. Services is the fastest growing segment of IBM, with more than 130,000 professionals serving customers in 160 countries. IBM Global Services integrates IBM’s broad range of capabilities – services, hardware, software and research – to help companies of all sizes realize the full value of information technology. For more information, visit www.ibm.com/services.

Through its Global Small Business unit, including its wholly owned subsidiary, Whistle Communications, IBM offers a variety of solutions designed to meet the needs of growing businesses. These solutions use IBM’s state-of-the-art e-business technology and Whistle’s award-winning InterJet thin server, and include IBM offers that range from IBM Small Business WebConnections to HomePage Creator, ThinkPad i Series 1500 notebook PCs and Netfinity 3500 M10. For further information, visit www.ibm.com/smallbusiness or call 888-IBM-5800.

(Note: All trademarks are the properties of their respective companies.)

(Note: The statements contained in this press release that are not historical facts are forward-looking statements that involve a number of risks and uncertainties. Therefore, the actual results of future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) regulatory and tax developments; (ii) changes in the company’s direct costs and operating expenses; (iii) the effectiveness of the company’s sales and marketing efforts, including its marketing agreement with American Express, American Express’ ability to set qualified appointments and the company’s ability to convert those appointments into sales; (iv) the estimated costs and effectiveness of capital projects and investments in technology and infrastructure; (v) the company’s ability to effectively implement its eBusiness strategy, including identifying and reaching agreements with strategic alliance partners, timely rollout of and attraction of clients and worksite employees to its eCommerce portal, effective generation of revenues from eBusiness initiatives and unanticipated development costs of eBusiness initiatives; (vi) changes in the competitive environments in the PEO industry; and (vii) the effectiveness and estimated costs of the company’s Year 2000 conversion and contingency plans. These factors are described in further detail in the company’s filings with the Securities and Exchange Commission.)