• Share
  • Email
  • Embed
  • Like
  • Private Content
TBR 2Q11 End-of-Quarter Benchmark Report
 

TBR 2Q11 End-of-Quarter Benchmark Report

on

  • 906 views

Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company ...

Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company performance in professional services, networking and mobility, computing and hardware, and software on a quarterly basis, leveraging our data to create industry benchmarks and landscapes that provide a business perspective on leaders and laggards and their business plans. We are experts in the business of technology.

The TBR Computing research team compiled information from the Second Quarter 2011 into this End-of-Quarter Benchmark Report. These supporting slides include information regarding segment views such as PC, x86 server, proprietary server, storage, and microelectronics. These segments are covered over different geographic areas such as the Americas, EMEA, and Asia Pacific. TBR provides insight and identifies trends, drill-downs, a market overview, and a quarterly focus.

Statistics

Views

Total Views
906
Views on SlideShare
906
Embed Views
0

Actions

Likes
0
Downloads
18
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    TBR 2Q11 End-of-Quarter Benchmark Report TBR 2Q11 End-of-Quarter Benchmark Report Presentation Transcript

    • Technology Business ResearchAccelerating Customer Success Through Business Research TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • COMPUTER BUSINESS QUARTERLYSMEnd-of-Quarter Benchmark ReportSecond Calendar Quarter 2011Publish Date: Oct. 4, 2011Contributors:Ezra Gottheil, Senior AnalystGeoff Woollacott, Senior AnalystGreg Richardson, AnalystAngela Lambert, Research AnalystKrista Macomber, Research AnalystEmily Searles, Research AnalystBeau Skonieczny, Research AnalystContent Editor: John Spooner (john.spooner@tbri.com),Computing Practice Director TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • Contents TBRExecutive Summary Segment Views 3 Key Findings & Trends 10-12 PC 4-5 Drill-Downs 13-15 X86 Server Segment 16-18 Proprietary Server Geographic 19-21 Storage 22-24 Microelectronics 6 Market Overview 7 Market Leaders Geographic Views 8-9 Quarterly Focus 25-27 Americas Ultrabooks merge the key features and 28-30 EMEA functionality that appeal to a variety of 31-33 Asia Pacific users to establish a unique value Appendix proposition. 34-44 CBQ Financial Metrics PC vendors will compete aggressively for 45-70 Additional Metrics share of the burgeoning Ultrabook 71-75 CBQ Taxonomy market as a new growth avenue. 76 TBR Capabilities 77 About TBR3 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary TBRClient hardware vendors will jockey for position in China and theUltrabook market, while capitalizing on HP uncertainty through 2H11 • Hardware vendors are leveraging regional partnerships and strategic investments to gain further name-share and validate their positions in emerging regions of China.Hardware vendors • PC vendors, such as Lenovo and Dell, are leveraging China as a test bed for new tabletwill continue to businesses. Vendors are capitalizing on demand for increased tablet functionality in China,invest in China to which TBR’s 2011 Tablet Studies suggest is stronger than in mature markets in Northoffset wavering America and EMEA, by releasing country-specific models and expanding their retaildemand in mature presence.markets • Dell followed its early 2011 investments in Chengdu with a new partnership with Baidu, in which Dell will deliver tablets to the Chinese market that are based on the Baidu OS. • As evidenced by TBRs HP Customer Reaction Survey, customers overwhelmingly believedVendors will target HP had lost its way when suggesting it would exit the PC business – opening doors forHP’s share in the rivals to drive HP displacement by capitalizing on customer uncertainty.face of thecompany’s uncertain • TBR believes HP will leverage the appointment of Meg Whitman as CEO to demonstratestrategic direction near-term action, helping quell immediate customer concerns while buying the company time to more concretely formulate its strategic direction.PC vendors target • TBR believes PC vendors, such as Acer and Asus, are aiming to drive higher-margin revenuereaccelerated through Ultrabooks, justifying premium price points by solving key user needs, such asgrowth by portability and connectivity.combining tablet • Ultrabooks will bridge current gap in the PC industry between full-feature notebooks andand PC functionality tablets, meeting demand for PC keyboard functionality with key tablet features, such asin Ultrabooks instant-on and longer battery life.4 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary TBRHardware vendors are offsetting weakness in mature markets byaligning product strategies with growing countries and verticals Top TopLOB Key Changes & Drivers Trends to Monitor Rev. Growth PC vendors are fostering growth by HP Ultrabooks and tablets are leading to targeting BRIC countries with mobile form Apple demand for new form factors,PC $8.9 factors, such as tablets, and restructuring 16% emphasizing portability, performance operations to reduce manufacturing costs. billion and instant-on connectivity. Vendors drove revenue by leveraging a HP Vendors will augment x86 offerings IBMx86 Server high-end solutions approach to win share $3.3 with storage and networking to gain from the proprietary server space. 15% enterprise market share. billion Proprietary server vendors bundled IBM Vendors will hone their solutionsProp hardware with software to capitalize on IBM strategies by leveraging alliances toServer new growth opportunities in cloud-based $1.5 target their offerings at growing 32% and virtualized environments. billion verticals. Vendors leveraged alliances and EMC Storage vendors will leverage Big acquisitions to develop adjacent NetApp Data and analytics capabilities toStorage $1.9 technologies to round out solutions 30.9% tailor their systems to customers capabilities. billion specific needs. Vendors leveraged partnerships to Microelectronics vendors will enhance core technologies and derive new Intel leverage R&D to continue improvingMicro- applications for their chipsets. Japan-based Intel manufacturing processes andelectronics vendors continued to restructure $13 21.1% capitalize on demand for mobile manufacturing capabilities to restore billion computing and low power profitability. consumption in Japan.5 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary TBRVendors will support infrastructure buildouts with end-to-end solutions,while expanding their mobile device portfolios to capitalize on demand TopGeo Key Changes & Drivers Top Rev. Trends to Monitor Growth TBR believes demand for Demand for cloud-based infrastructures and HP mobile computing devicesUnited services in growing countries is boosting Apple and datacenter buildouts,States/ Americas commercial growth, while consumer $14 54.5% namely in growing countriesAmericas spending continues to be driven by demand billion such as Brazil, will fuel for mobile, Internet-connected devices. Americas growth. Vendors offset slowed spending in mature HP Vendors will highlight reduced EMEA markets by leveraging channel Apple TCO with industry-specific,EMEA expansion in the Middle East and Eastern $11.7 68.3% cloud-based solutions to Europe. In 2Q11, EMEA posted revenue billion offset slow enterprise growth. growth in the x86 server and tablet markets. APAC led geographic revenue growth, fueled Vendors will leverage cloud- by demand for virtualized and cloud-based Panasonic based solutions to capitalizeAsia Apple environments. China was a key target for $18.3 on demand from SMB andPacific 179.7% mobile and PC sales, with Apple mobile sales billion government customers in leading significantly over competitors. growing APAC countries. Emerging markets led revenue growth for IT hardware vendors as CBQ vendors will continueEmerging spending in mature markets remained slow. Companies leveraged targeting the Public Sector inMarkets mobile devices, as well as solutions supporting IT infrastructure growing countries to support buildouts to grow market share with an emphasis on BRIC countries. rapid future growth.6 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary TBRDemand, particularly in growing countries, for mobile form factor PCs andintegrated datacenter solutions will support future hardware growth• Demand for mobile and 2Q11 REVENUE GROWTH VS. OPERATING MARGIN Internet-connected devices and TBR Apple: (32.8, 82.0) the resulting increased network 30% traffic requirements are driving HDS NetApp IT hardware growth across both Intel EMC mature and emerging regions. 20%• Vendors will derive new Lenovo Avg. Revenue Growth 12.8% opportunities for revenue AMD Revenue Growth expansion by developing 10% IBM crossover business and personal Fujitsu Toshiba tablets, while developing HP datacenter solutions to support Dell 0% cloud and virtualized -10% Oracle/Sun 0% 10% 20% 30% 40% Panasonic infrastructure buildouts. Sony Acer: Avg. Operating Margin• TBR anticipates uncertain (-6.9, -24.1) 8.6% -10% macroeconomic conditions in SOURCE: TBR Operating Margin mature markets, such as Western Europe and the U.S., NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE. will further drive vendors to penetrate emerging markets.7 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary TBRHardware vendors are leveraging product development initiatives tocapitalize on growth opportunities, such as cloud-based datacentersRevenue, Growth & Operating Margin LeadersCompany Size Key Strategy Drivers & Changes $31.2 Increase profitability by leveraging demand for HP’s revenue grew 1.5% year-to-year to $31.2 billion inHP billion higher-margin enterprise hardware. 2Q11, driven by software and ESSN growth. Fuel strong revenue expansion through continual Revenue growth was driven by strong sales of the iPhone $28.6Apple product and service introductions, such as the and iPad, with unit sales growing 142.2% and 182.8% year- billion iPad 2 and iPhone 4. to-year, respectively. $26.7 Accelerate revenue growth by integrating hardware, Corporate revenue expansion was led by 17.5% YTY STGIBM billion services and software. revenue growth, with IBM Software revenue up 16.9%.Company Growth Key Strategy Drivers & Changes Dominate public awareness with innovative Mac sales growth started to slow in 2Q11; however, AppleApple 82% products and astute marketing while maintaining a leveraged iPad success to outpace the market growth rate premium market position in all product lines. for PC sales. Leverage acquisitions to provide comprehensive Strong sales of the HDS Virtual Storage Platform resultedHDS 26.7% solutions that address a broad range of markets. in HDS external disk storage growth of 23.8% YTY. NetApp maintained double-digit software and services Leverage partners and product development toNetApp 26.4% revenue growth, on the back of customer demand for end- drive international expansion. to-end solutions.Company OM % Key Strategy Drivers & Changes Apple improved margin performance in 2Q11, resulting Support margin improvement by focusing on salesApple 32.8% from a stronger mix of iPhone sales, which are margin- of Apple’s most profitable product lines. accretive due to decreased manufacturing costs. Intel is leveraging its broad customer presence and Operating margin fell from 37% in 2Q10 to 30.2% in 2Q11,Intel 30.2% cyclical product improvements to drive above- as Intel continued to record higher start-up costs related to average growth and margin performance. 22-nm manufacturing technology. Grow margins across the hardware portfolio by STG operating margin expanded 310 basis points to 8.4%IBM 19.1% driving sales of integrated solutions to midsized in 2Q11, driven by an improving product mix. enterprise customers (MSEs).8 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary: Quarterly Focus TBRUltrabooks merge the key features and functionality that appeal to avariety of users to establish a unique value propositionUltrabooks will strike a balance between portability, affordability KEY PC DEVICE RANKINGSand functionality to establish a new position in the PC market. 12 Battery Life: Functionality Ranking (Higher is better)• Ultrabooks will help fuel future PC demand by creating a more Ultrabooks 10 Notebooks Best enticing value proposition than traditional notebooks. $$$ $$ Average 8 Poor• TBR believes both traditional notebook and tablet PCs stand to be Tablets cannibalized by the entrance of Ultrabooks. 6 Pricing Rated by Bubble $ 4 Size (Larger is better) $ 2 Key Opportunity for Ultrabook Smartphones Business Customers: 0 Windows 0 2 4 6 8 10 12 Portability Ranking (Higher is Better) Traditional Sweet spot for value-to- performance • Low Price Point Notebook • Portability • Functionality Tablet • Instant-On (SSD) • Long Battery Life Windows 8 will influence sales of • Business Apps Ultrabooks over Macs with • Interoperability • Low Price Point • Functionality enhanced business functionality, • Connectivity • Highly Portable • Interoperability a dedicated app store and • Security • Instant-On • Business Apps • Touch (long- broader device interoperability. • Long Battery Life • Connectivity term) • Touch Screen • Security9 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Executive Summary: Quarterly Focus TBRPC vendors will compete aggressively for share of the burgeoningUltrabook market as a new avenue to future growth• The Intel-architected Ultrabook PC form factor will follow in the footsteps Ultrabook vendors will need to find the right of Apple’s MacBook Air, addressing customer demand for a high- balance of price, mobility and performance to capture sales opportunities – much like Apple performance, highly mobile, constantly connected device to perform a did with the SSD-based MacBook Air in 4Q10. range of personal and business computing tasks.• Ultrabooks meet the more demanding resource requirements of MACBOOK AIR UNIT SHIPMENTS AND MACBOOK AIR UNIT SHIPMENTS AND LAPTOP productivity applications addressed by full-feature notebooks, as well as TBR LAPTOPGROWTH SALES SALES GROWTH 2,000 1,585 the instant-on capabilities for day-to-day tasks, such as email. 1,600 Unit Shipments 1,230 (Thousands) 1,210 1,200• TBR believes the Ultrabook value proposition, combining the ease of use 800 of tablets and functionality of full-feature notebooks in a single device, 400 16 12 will resonate with SMB and enterprise customers. 0 2Q10 3Q10 4Q10 1Q11 2Q11 Macbook Air Units• Ultrabooks allow for instant-on capabilities through SSD drives and the SOURCE: TBR AND APPLE Introduction of SSD-Based latest processors, and will evolve to deliver touch-screen functionality to MacBook Air in October with create a more flexible interface across different uses and apps. improved pricing options 2011 ULTRABOOK LINEUP Vendors are rushing to introduce Ultrabooks to market; success will depend on the ability to compete with Apple on price, performance and mobility VENDOR MODEL ETA & Price Asus UX31 Oct. <$1,000 • Vendors are rapidly introducing Ultrabooks, led by Asus and Acer in October, to Toshiba Portege Z830 Nov. <$1,000 be followed by Toshiba and Lenovo later in the year. Acer Aspire S3 Oct. ~$1,000 • In August, Apple launched new MacBook Airs beginning at $999, which it claims Lenovo U300s Late 2011 offer a two-fold performance increase over the prior generation. Asus and $1,195 Toshiba have announced plans to introduce models below the $1,000 price point, SOURCE: TBR AND PC VENDORS which we believe will offer performance competitive with Apple’s new offerings.10 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: PC TBRPC vendors are penetrating emerging countries to offset weak consumerspending in mature markets• Due to weak demand in TBR 2Q11 YEAR-TO-YEAR PC REVENUE GROWTH VS. CORPORATE REVENUE GROWTH mature markets and tablet 90% cannibalization, average PC Apple revenue growth fell from 70% 30.5% YTY in 1Q11 to –4.5% YTY in 2Q11. Corporate Revenue Growth Average PC Revenue Growth = -4.5%• Vendors are racing to 50% penetrate growth markets, particularly in China, to offset the effects of 30% Average Corporate lackluster demand in Acer: Revenue Growth for (-28.6, -24.1) Lenovo mature geographies. Toshiba Segment = 9.9% 10%• Lenovo and Dell are Panasonic Sony investing to gain share in HP Dell -20% -10% 0% 10% 20% smaller cities in China and -10% close the PC revenue gap PC Revenue Growth between Apple. SOURCE: TBR NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.11 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: PC TBRPC vendors are leveraging restructuring to boost profitability, whileinvesting in R&D to support demand for mobile form factors, like tabletsPC Revenue LeadersCompany Size Key Strategy Drivers & Changes Investigate strategic alternatives for the PSG group Weak consumer demand for notebook and $8.9 to drive long-term profit expansion, including theHP desktop PCs drove PSG revenue down 3.3% year- billion potential separation of its commodity PC business to-year to $9.6 billion. from its higher-margin enterprise operations. Total cost of goods sold fell 590 basis points YTY Cut costs and offset declining unit shipments by $7.9 as a result of stabilizing hardware componentDell re-architecting PC designs and manufacturing billion costs, a more efficient component supply chain operations. and a product mix shifting toward solutions. Maintain leadership position in China’s PC market Notebook revenue rose 13.7% year-to-year to $5.6Lenovo while expanding distribution in mature and global $3.5 billion, accounting for 59.8% of total billion emerging markets. revenue.PC Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes Simplify the consumer PC experience, including a Mac sales slowed due to iPad cannibalization.Apple 16% simplified interface and cross-device However, Apple achieved another record iPad interoperability while maintaining high quality. sales quarter, with unit sales growth of 183% YTY. Restructure PC production, including leveraging Laptops realized 13.7% year-to-year growthLenovo 15% contracting manufacturers, to lower operating driven by emerging markets. expenses and help improve PC profitability. Leverage growing brand presence and sales Notebook PC revenue growth of 1.3% YTY and a capabilities in China to foster Dell tablet adoption 4% increase in unit shipments of portablesDell –0.7% while awaiting Windows 8 or an Android-based partially offset a 3.8% decline in workstation unit productivity application to meet demand for the shipments for Dell in 2Q11. BlackBerry of the tablet space in mature markets.12 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: PC TBRPC vendors will overcome weak commercial demand in mature marketsby leveraging Ultrabooks and new tabletsTrends & Outlook• PC vendors will race to develop Ultrabooks, positioning the devices as high-end tablet alternatives with superior performance and instant-on capability.• Competitors , such as Dell, will leverage customer uncertainty around HP for commercial PC unit shipment growth.• Vendors are leveraging restructuring to support margins in the face of weak consumer demand. In coming quarters, we believe they will develop tablet offerings with improved crossover business and leisure functionality to overcome headwinds and foster PC unit shipment growth. Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & Deals Company TBR Insights Company TBR Insights The 2Q11 release of OS X Lion and iCloud will In June, Panasonic announced a make for a more integrated computing experience partnership with Oculis Labs to equip Apple catering to both Windows and iOS users. Toughbook mobile computers with the Additionally, it will help promote Macbook Air Panasonic optional PrivateEye Enterprise data sales with enhanced multi-touch capabilities. privacy software, which recognizes the Sony increased R&D expenses by 40 basis points to user’s retina via webcam. 6.4% of revenue, or $1.2 billion, which TBR Sony attributes to Sony’s expanded investment in new In August, HP signed a PC equipment products, such as tablets, Ultrabooks and new deal with the U.S. Air Force to provide gaming systems. HP HP Z800 and Z400 workstations, as well as two configurations of the HP Compaq Toshiba is introducing eco-friendly devices to grow Toshiba 6005 Pro Business desktop PCs. PC revenue. In 2Q11, it rolled out PCs with “peak- shift function” to reduce grid power consumption, as well as eco-chips.13 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: x86 Server TBRx86 server vendors continue to close the performance gap betweenproprietary servers to win market and wallet share• Average x86 revenue TBR 2Q11 x86 REVENUE GROWTH VS. CORPORATE REVENUE GROWTH growth fell to –8.6% YTY in 20% 2Q11 from 7% in 2Q10 – largely due to outliers Acer and Oracle/Sun. 15%• x86 server vendors Average x86 Corporate Revenue Growth Revenue Growth = -8.6% continued to chip away at IBM proprietary server market 10% share, delivering high-end x86 offerings that are increasingly capable of 5% supporting mission-critical workloads – supported in HP 2Q11 by the April release Oracle/Sun Dell 0% of Intel Xeon E7 -50% -40% -30% -20% -10% 0% 10% 20% 30% processors. Acer: Average Corporate Revenue (-30.8, -24.1) Growth for Segment: -1.9% -5% x86 Revenue Growth SOURCE: TBR NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE. 14 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: x86 Server TBRVendors will leverage implementation into end-to-end, cloud-enablingsolutions to maintain x86 server sales growth in 2H11x86 Server Revenue LeadersCompany Size Key Strategy Drivers & Changes Leverage HP’s enterprise hardware business, HP’s industry standard server revenue grew $3.3HP including its x86 server lineup, to develop integrated 8.5% YTY in 2Q11, led by demand for billion solutions and drive corporate growth. ProLiant and other x86-based blade servers. Augment Dell’s x86 server portfolio with storage Dell’s server business led its segments in $2.1 and networking acquisitions to meet growing growth, increasing 8.7% year-to-year, or 90Dell billion demand for datacenter infrastructure buildouts and basis points to 13.1% of total revenue, driven boost corporate top-line growth. by SMB infrastructure buildouts. High-end System x and growth markets Spur adoption of System x servers in cloud and $1.5 revenues grew a reported 26% and 27%,IBM virtualized datacenters to spur adoption of high-end billion respectively, through cross-portfolio growth offerings and drive revenue and profit growth. initiatives.x86 Server Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes Bundle System x into customer-centric solutions to System x revenue grew 15% year-to-year toIBM 15% expand its addressable customer base into the small $1.5 billion, leading the systems and enterprise and position for higher-value deals. technology group. Dell’s Large Enterprise revenue grew 0.8% Build solutions around x86 servers to increase shareDell 8.7% annually, driven by demand for servers and of small and midsized enterprise customers’ wallets. services. Expand from the consumer space into the profitable Competitive pricing and integration withHP 8.5% enterprise space by integrating x86 servers into end- storage and networking into solutions drove to-end solutions. HP’s x86 server revenue growth.15 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: x86 Server TBRx86 server vendors will close the performance gap to high-end servers,while focusing on energy efficiency and enterprise solutionsTrends & Outlook• Vendors are capitalizing on an industry shift toward consolidated IT environments by building solutions around their x86 servers. These vendors will continue leveraging acquisitions, expanding their storage and networking capabilities, to augment their server portfolios and further this solutions approach.• Green technology is increasingly important in markets with restricted power supplies such as Japan. TBR expects vendors will increasingly develop technologies and processes to reduce the overall power consumption of the server environment, such as IBM with its Systems Director Active Energy Manager.Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & DealsCompany TBR Insights Company TBR Insights Fujitsu announced upgrades to its Primergy x86 In August, Dell closed its acquisition of server lines centered on scalability and performance Force10 Networks, provider of Open Cloud to enable customer migration of mission-critical Networking high-performance datacenter workloads to virtualized and cloud environments. Dell solutions, to complement its x86 serverFujitsu TBR believes Fujitsu will drive server unit volume by portfolio and further its solutions leveraging an expanded sales organization in North capabilities. America and a continued focus on entry-level In a deal with the California Dept. of Water offerings to accelerate x86 server adoption in Resources, HP will leverage its BladeSystem underpenetrated markets. technology to migrate a majority of the HP IBM is leveraging management tools and more DWR’s physical servers to a virtualizedIBM efficient servers to expand its System x addressable environment, consolidating the customer base into growing geographies. organization’s 600 physical servers to 160.16 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Proprietary Server TBRHP and Oracle/Sun continued to struggle against x86cannibalization, and, in HP’s case, widespread hardware customeruncertainty server• Average proprietary revenue growth declined from 7.2% YTY in 1Q11 to TBR 2Q11 PROPRIETARY SERVER REVENUE GROWTH VS CORPORATE REVENUE GROWTH 3.8% in 2Q11, as x86 server 15% vendors continue closing the performance gap and Average Proprietary IBM Server Revenue Growth = integrate their systems as 3.8% cornerstones of larger, Corporate Revenue Growth customer-centric solutions.• Despite its 1Q11 efforts to 5% stifle HP’s hardware business and drive a single-stack, HP Average Corporate Revenue SPARC-centric approach by Oracle/Sun Growth for Segment = 4.6% cutting support for Intel’s -20% -10% 0% 10% 20% 30% 40% Itanium processor, Oracle posted –11.9% YTY growth.• HP’s growth dipped into the -5% red in 2Q11, and TBR believes SOURCE: TBR Proprietary Server Revenue Growth the vendor will remain NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE. challenged in 3Q11 as it works to regain hardware customer trust following uncertainty regarding PSG.17 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Proprietary Server TBRVendors are painting a picture of reduced TCO by building end-to-end,virtualized and cloud-enabling solutions around their high-end serversProprietary Server Revenue LeadersCompany Size Key Strategies Drivers & Changes $1.5 Strong performance in System z was a key driver of Support new workloads and position System zIBM IBM’s double-digit revenue expansion across nearly billion as part of larger solutions. 40 growth market countries. Bundle high-end servers with software, In a deal with Desjardins General Insurance Group, $459 services and other enterprise hardware HP leveraged its Integrity servers to develop aHP million offerings to further its traction in the converged infrastructure catering to the growing enterprise space. financial industry. Foster new growth opportunities by bundlingOracle/ Oracle rolled out its VM 3.0 solution in 2Q11 to $439 its software with Sun hardware into industry- simplify and accelerate server virtualization andSun million focused solutions, including alliances and management – touting reduced TCO to drive sales. acquisitions as necessary as a value-add.Proprietary Server Revenue Growth LeadersCompany Growth Key Strategies Drivers & Changes Leverage workload optimization to drive System z mainframe revenue grew 61% YTY to $758IBM 32% adoption of its business-class System z and million, while POWER systems revenue grew 12% to zEnterprise BladeCenter Extension offerings. $764 million. Win more large enterprise deals by investing Business-critical server revenue fell 8.7% YTY to $459 in R&D initiatives to better integrate HP’sHP –8.7% million due to increased competition and stricter servers with its networking, storage, software budgets among enterprise and public customers. and services offerings.Oracle/ Fuel server sales by delivering bundled Oracle improved its hardware financial performance –11.9% hardware and software solutions that enable in 2Q11, as it shifted focus from x86 to servers toSun cloud-based and virtualized environments. SPARC servers.18 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Proprietary Server TBRIBM will leverage workload optimization to maintain double-digitSystem z growth despite a landscape shifting toward x86-based systems Trends & Outlook • Proprietary server vendors are combatting x86 server market cannibalization by leveraging an end-to-end solutions approach to boost ROI and derive new use cases for their offerings. Vendors will leverage this solutions approach to deliver the value proposition of reduced TCO and fuel unit shipment growth. • IBM will continue leveraging tools like zBladeCenter extension to piece together multi-architecture systems and drive sales across its server portfolio – including System x, POWER and System z. IBM is leveraging the mainframe as a tool to support new workloads, positioning System z as part of larger solutions and highlighting reduced cost per workload in data-intensive environments to drive adoption. Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & Deals Company TBR Insights Company TBR Insights IBM has made System z more accessible with zBx and its latest, lower-priced zEnterprise For its POWER Systems, IBM maintained its IBM strategy of gaining share through 114 mainframe to target customers in a wider range of verticals. competitive takeovers, reporting more than IBM 250 competitive displacements, primarily TBR believes Fujitsu will drive new growth in from Oracle and HP, during 2Q11 for more its proprietary server business by penetrating than $300 million in revenue. the cloud market, developing hardware Fujitsu implementation platforms to fuel solutions sales and strengthening its technology capabilities to support recovery in Japan.19 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Storage TBRStorage vendors are driving revenue growth by developing cloud,virtualization and Big Data solutions while cultivating channel expansion• TBR believes comparatively TBR 2Q11 STORAGE REVENUE GROWTH VS CORPORATE REVENUE GROWTH weaker demand for 30% cloud, virtualization and NetApp Big Data solutions, coupled EMC HDS with challenging Public 20% Sector conditions, drove Average Corporate Revenue down average storage Corporate Revenue Growth Growth for segment = 12.6% IBM revenue growth from 14.6% in 1Q11 to 9.7% YTY 10% in 2Q11.• The revenue growth gap HP within the storage market Dell Oracle/Sun 0% continued to widen. Dell -30% -20% -10% 0% 10% 20% 30% 40% fell further behind the growth leaders, as it Average Storage Revenue Growth = 9.7% struggled following the -10% 1Q11 termination of its Storage Revenue Growth SOURCE: TBR relationship with EMC. NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.20 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Storage TBRStorage vendors are augmenting R&D spend with acquisitions andpartnerships to penetrate growth niches – namely cloud and Big DataStorage Revenue LeadersCompany Size Key Strategy Drivers & Changes Leverage high-end offerings to sustain core Mid-tier revenue grew 27% YTY, due to increased $1.9 market momentum, while investing inEMC adoption of VMAX and EMC’s use of partners to billion acquisitions and R&D to capitalize on demand for deliver its portfolio to new industries. cloud and Big Data solutions. Integrate core storage, compute and networking Demand for virtualization and cloud computing $1 portfolios with partner software to deliverHDS offerings drove HDS storage growth and led to billion Converged Datacenter solutions and capitalize on double-digit revenue expansion. demand for cloud-based datacenters. Leverage acquisitions to enhance HP’s storage HP introduced HP Peer Motion software and $976HP portfolio and global presence, positioning the P10000 3Par Storage Systems to enhance client million company for inorganic growth. flexibility in public and private cloud environments.Storage Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes Inorganically enhance proprietary technologies Strong demand for FAS6000 products enabled theNetApp 30.9% and increase channel presence to gain share of FAS line to climb 160 basis points to 47.4% of growing niches within the storage market. NetApp’s total revenue. HDS is leveraging its partner channel, Hitachi HDS leveraged TrueNorth to expand the breadth ofHDS 26.7% TrueNorth, to deliver value-add services and its storage offerings, enhancing its Big Data and create new growth opportunities for growth. industry-specific solutions capabilities. Integrate proprietary and acquired portfolios into EMC’s Symmetrix revenue grew a reported 15%EMC 17% cloud and Big Data solutions to penetrate new sequentially due to increased adoption of VMAX. geographies and customer segments.21 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Storage TBRStorage vendors will continue to leverage partners and acquisitions toround out their portfolios and derive new growth opportunitiesTrends & Outlook• Storage vendors are aggressively targeting alliances and acquisitions to enhance their adjacent technology capabilities, such as networking, and create new growth opportunities via a solutions approach. Vendors are developing cloud and Big Data solutions to capitalize on demand in growing verticals such as healthcare and telco.• We believe storage vendors will develop industry-specific cloud-based storage solutions to quell customer fears around security in verticals with sensitive data and foster migration to cloud.• TBR anticipates market volatility and macroeconomic uncertainty will create headwinds to future growth for storage vendors – particularly pure-play vendors with strong Public Sector ties, such as NetApp.Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & DealsCompany TBR Insights Company TBR Insights EMC rolled out the NYSE Technologies Capital EMC purchased some assets of Asankya Markets Community Cloud in conjunction with Inc., a provider of application accelerationEMC VMware and the NY Stock Exchange/Euronext to services and solutions utilized by providers drive sales of its unified storage solutions through EMC of storage as a service, virtual desktops and cloud and Big Data analytics. enterprise applications, as well as by the Fujitsu integrated the SAP HANA in-memory U.S. Federal government. appliance into its infrastructure, including storage, IBM will sustain momentum in storage andFujitsu to enable real-time, large-scale analytics and expand analytics by leaning on acquired portfolios, IBM its cloud business through bundled solutions. namely Netezza, to develop solutions that IBM is integrating storage as part of larger solutions, enable optimized datacenters. to capitalize on demand for Big Data warehousing HDS acquired NAS vendor BlueArc toIBM HDS and analytics solutions and position for an expanded expand its Big Data analytics capabilities. storage business.22 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Microelectronics TBRMicroelectronics vendors are shifting focus away from PCs and towardnew applications for chips to drive growth• Average microelectronics TBR 2Q11 MICROELECTRONICS REVENUE GROWTH VS. CORPORATE REVENUE GROWTH revenue growth fell from 25% Average 14.2% YTY in 1Q11 to 4.8% Microelectronics Revenue in 2Q11, hindered primarily 20% Growth = 4.8% Intel by poor performance from Sony and demand for Corporate Revenue Growth 15% traditional PC form factors. IBM AMD Average Corporate Revenue Growth for Segment = 9.9%• Sony fell from double-digit 10% YTY growth in 1Q11 to a decline of nearly 10% in 5% Toshiba 2Q11, as it continues working toward recovery in the wake of Japan’s March Sony -10% -5% 0% 0% 5% 10% 15% 20% 25% earthquake. -5%• AMD accelerated growth by leveraging its new Fusion SOURCE: TBR Microelectronics Revenue Growth APUs to support demand for increased performance NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE. and battery life in mobile devices.23 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Microelectronics TBRChip manufacturers are leveraging restructuring to support margins, anda solutions approach to derive new use cases for their offeringsMicroelectronics Revenue LeadersCompany Size Key Strategy Drivers & Changes Atom Processor unit shipments increased 76% $13 Build presence in consumer and enterprise YTY, due to demand for medical imaging, printIntel computing devices through advancements in PC billion imaging, communications and industrial and server architectures. embedded applications. Consolidate and restructure its semiconductor Toshiba combined its Semiconductor Company $3.4 operations to maximize profitability and market and Storage Products Company into a new in-Toshiba billion responsiveness while increasing sales in emerging house company that will leverage synergies for geographies. improved operations. Leverage partnerships and R&D to deliver Unit shipment growth was fueled primarily by $1.6AMD improved multimedia and video capabilities as demand for Fusion APUs and mobile billion well as client device battery life. microprocessor units.Microelectronics Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes Deliver new products to market by strategically TBR estimates notebook sales achieved 10.9%Intel 21.1% alternating upgrades to existing architectures and YTY growth, driven by the success of the Core i3, comprehensive architecture refreshes. i5 and i7 processor lines. Toshiba is piggybacking semiconductor sales on Leverage microelectronics partnerships and Social Infrastructure growth, driven by Toshiba’sToshiba 13% acquisitions to capitalize on demand for more investment in energy system growth as part of its efficient power generation. green initiative. Accelerate revenue growth by delivering purpose- IBM’s microelectronics revenue grew 4.0% YTY toIBM 4% built solutions, which integrate its chips and other $567 million in 2Q11. hardware with software and services.24 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Segment View: Microelectronics TBRMicroelectronics vendors will continue investing in R&D, acquisitions andpartnerships to spur adoption of their chips in new hardware systemsTrends & Outlook• Vendors are leveraging R&D and partnerships to derive new applications for their chipsets, including in mobile and entertainment devices, to capitalize on demand and create new avenues for growth.• Microelectronics vendors will target growing verticals for revenue expansion by penetrating industries, including healthcare and bioanalytics, through supporting research with smart, energy-efficient chips and computer systems.• Intel introduced plans for Ultrabooks, a new thin-and-light PC form factor that will allow the company to embed its latest processor technology and establish an early market position in a niche product area. Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & Deals Company TBR Insights Company TBR Insights In May, IBM expanded upon its 10-year Intel purchased Fulcrum Microsystems to partnership with ETH Zurich, a European enhance its enterprise market capabilities with science and engineering university, investing Intel more efficient switching and processor IBM $90 million to open the Binnig and Rohrer technology that allows for enhanced speed and Nanotechnology Center in Switzerland with ET performance in cloud computing. Zurich. AMD is leveraging joint development initiatives to derive new applications for its chipsets, The Intel Science and Technology Center AMD evidenced in its June partnership with desktop represents the next $15 million installment of videoconferencing solutions provider ViVu. Intel Intel’s freshly announced five-year, $100 million program to accelerate university research and innovation across the nation.25 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: Americas TBRVendors are leveraging solutions to target SMBs in growing countries inthe Americas, offsetting weak consumer demand in mature markets• In 2Q11, average Americas revenue increased 8.3% as companies leveraged cloud-based solutions to 2Q11 AMERICAS REVENUE GROWTH VS. CORPORATE REVENUE GROWTH TBR 30% address the needs of Apple: governments, universities HDS NetApp (84.8, 82.7) and SMBs in growing Intel Average Corporate Revenue countries, such as Brazil. Growth for segment = 12.8% 20% EMC• Weak consumer spending Lenovo Corporate Revenue Growth hindered overall growth. AMD IBM 10% TBR believes this will be Fujitsu compounded in coming Toshiba quarters by a challenging Sony Panasonic Dell HP Public Sector environment. -20% Oracle/Sun -10% 0% 0% 10% 20% 30% 40%• NetApp’s Americas Acer: Average Americas Revenue revenue grew 28.8% YTY to (-18.5, -24.1) Growth = 8.3% -10% $817 million, driven by Americas Revenue Growth demand from its Telco and SOURCE: TBR Service Provider group, as well as from its State, Local NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE. and the Higher Education group early in 2Q11.26 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: Americas TBRVendors are growing Americas revenue by leveraging solutions tocapitalize on demand for infrastructure buildouts in growing countriesAmericas Revenue LeadersCompany Size Key Strategies Drivers & Changes Invest in emerging markets, such as Brazil, to Revenue in the Americas dipped 0.7% year-to- $14 diversify HP’s revenue stream in the Americas while year, driven by increased competition in theHP billion leveraging advanced infrastructure solutions to consumer market and weaker demand for address mature markets, such as the U.S. enterprise networking, software and services. Leverage carrier expansion and cyclical product Expansion of Apple products to the Verizon $12.6Apple refreshes, while driving sales of high-margin product network and the introduction of the iPad 2 billion lines such as the iPhone to sustain Americas growth. helped spur growth in the Americas. Increase penetration of emerging countries in the Americas revenue increased 9.8% year-to-year, $11.2IBM Americas, such as Brazil, via IBM’s Growth Markets driven by momentum in IBM’s Server and billion and Smarter Planets initiatives. Software businesses.Americas Revenue Growth LeadersCompany Growth Key Strategies Drivers & Changes The Americas comprised 35.4% of Apple’s Leverage carrier expansion and the introduction of revenue, down from 39.7% in 2Q10 asApple 54.5% new devices, such as the iPad 2 and iPhone 4, to international expansion led the region to foster growth in the Americas. comprise a smaller share of total revenue. Invest in Brazilian software developers to write local Demand for cloud infrastructure and high-endIntel 33.9% code to strengthen HP’s position in South American servers offset weak consumer PC demand in markets. the U.S. to fuel Intel’s 2Q11 Americas growth. Lean on midmarket penetration and expansion in Americas revenue grew 28.8% YTY, driven by growth verticals to offset U.S. Federal sector demand from NetApp’s Telco and ServiceNetApp 28.2% uncertainty and grow Americas revenue 15.8% YTY Provider group, as well as from its State, Local in 3Q11. and the Higher Education group.27 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: Americas TBRVendors are capitalizing on demand for mobile PC form factors in theenterprise and SMB IT buildouts in growing countries in the AmericasTrends & Outlook• PC vendors will leverage portable form factors, such as tablets and Ultrabooks, to target mobile professionals in the U.S. and offset the effects of weak consumer demand. o In tandem, TBR anticipates PC vendors will expand their services offerings, such as mobile device management, to deliver an additional value-add.• Vendors will target expansion in growing countries, such as Brazil, by expanding their R&D and sales and marketing reach. They will also drive penetration of growth verticals in mature markets, like the U.S., with SMB-focused end- to-end solutions to combat headwinds created by constrained Federal budgets in 2H11.Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & DealsCompany TBR Insights Company TBR Insights Panasonic will target SMBs in the U.S. with its In June, Panasonic and the Branded CitiesPanasonic new Cloud Business Phone System, rolled out Network (BCN), a subsidiary of EL Media, in 2Q11. Panasonic partnered to deliver consumer-based media. Panasonic will be the exclusive provider of all Stephen DiFranco replaced DeWitt as head of digital signage in North America, while BCNHP HP’s PSG business in the Americas in 2Q11. will serve as a sales agent for Panasonic’s third-party advertising in North America. EMC will invest $100 million over five years in its R&D, manufacturing and sales and In June, Fujitsu partnered with software marketing capabilities in Brazil, including a vendor ABBYY to gain share in the U.S. byEMC center in Rio de Janeiro supporting the Big Data Fujitsu targeting SMBs with jointly-developed solution development initiatives of customers content management solutions delivered in the oil and gas industries. through distributor Ingram Micro.28 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: EMEA TBRVendors are leveraging the channel and a solutions approach to overcomethe effects of economic uncertainty in EMEA• The EMEA region posted TBR 2Q11 EMEA REVENUE GROWTH VS. CORPORATE REVENUE GROWTH the smallest revenue 30% Apple: (68.3, 82.0) growth of the geographic NetApp HDS segments, largely due to Average EMEA Revenue Growth = 6.0% Intel decreased spending in 20% mature markets. Average Corporate Revenue EMC Corporate Revenue Growth Growth for Segment = 12.8%• Vendors targeted emerging Lenovo countries, such as those in AMD IBM the Middle East and 10% Fujitsu Eastern Europe, primarily by leveraging an expanded Toshiba Panasonic channel. Oracle/Sun HP Sony 0%• Apple leveraged carrier -30% -20% -10% 0% Dell 10% 20% 30% and retail footprint Acer: expansion to maintain the (-50.0, -24.1) strongest revenue growth, -10% while HDS drove sales of EMEA Revenue Growth SOURCE: TBR its virtualization and cloud- enabling capabilities to NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE. place second. .29 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: EMEA TBRHardware vendors are targeting emerging markets in EMEA throughnew product offerings, alliances and acquisitionsEMEA Revenue LeadersCompany Size Key Strategy Drivers & Changes EMEA revenues declined 1.7% year-to-year, Target growing countries, such as those in the Middle $11.7 resulting from more stringent spendingHP East and Eastern Europe, and growing verticals with billion levels from enterprise and government HP’s solutions approach to offset weak spending. organizations for enterprise solutions. EMEA revenue rose 16.2% year-to-year, Leverage software and storage partnerships $7.8 driven by continued growth in the U.K.,IBM throughout emerging markets in EMEA to capitalize billion France and Spain, and a return to growth in on growing demand for Big Data analysis and tools. Germany and Italy. Expand iPhone market share by leveraging deals with iPhone sales bolstered Apple’s performance $6.6 foreign carriers while targeting lower-endApple in emerging markets throughout the Middle billion smartphone markets in emerging regions in the East, leading revenue growth in EMEA. Middle East via discounted iPhone 3GS pricing.EMEA Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes EMEA sales grew 70.6% year-to-year in Expand retail footprint in EMEA to sustain robustApple 68.3% 2Q11, supported by carrier expansion and growth in the region. the introduction of the iPad 2. Leverage virtualization and cloud capabilities to TBR attributes HDS’ double-digit EMEAHDS 26.7% increase EMEA revenue by supporting SMB growth to increased sales of converged datacenter buildouts. datacenter solutions. Leverage acquisitions to increase production and EMEA revenue grew 21.4% year-to-year to development activities in Western Europe whileLenovo 21.4% $1 billion as a result of Lenovo’s “protect expanding its sales channels and access to R&D and attack” growth strategy. facilities.30 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: EMEA TBRVendors will expand EMEA revenue by delivering solutions whileexpanding their R&D and sales and marketing arms in growing countriesTrends & Outlook• Growth in EMEA is mainly attributable to growing countries throughout the Middle East and Africa. Companies including Fujitsu and NetApp have been investing to develop solutions supporting IT infrastructure buildouts, primarily among SMB customers in these countries.• To foster demand in mature, western European markets, vendors are leveraging alliances and acquisitions to develop cloud-based, industry-specific solutions, targeting growing verticals such as healthcare.• Vendors will leverage expanded R&D and channel sales footprints to further their traction in key countries within the region, such as BRIC countries. Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & Deals Company TBR Insights Company TBR Insights In June, Dell opened its first Cloud Research and Through its new partnership with Desktone, Development Center in Dublin, following its announced in August, NetApp will deliver Dell plans announced in April to spend $1 billion on virtualized, Desktop as a Service solutions to cloud computing R&D. NetApp cloud service providers, which TBR expects will increase EMEA revenue as companies Panasonic opened the eco Customer Care across EMEA adopt cloud infrastructures. Centre in Dubai to support its initiative of Panasonic becoming the No. 1 green innovation company Adding to its growth in acquisitions, Lenovo in the electronics industry. announced the purchase of Medion AG in EMC is gaining traction in growing geographies, Lenovo July, which will increase Lenovo’s reach in including the Middle East and Africa, by Western Europe by growing its sales channels EMC expanding its Velocity Partner Program into key and R&D specific to the region. countries.31 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: APAC TBRAPAC vendors will leverage restructuring, a bolstered channel in growingcountries and new products to offset weakness in Japan TBR 2Q11 APAC REVENUE GROWTH VS. CORPORATE REVENUE GROWTH• The APAC region again led the Apple: geographies in 30.0% (179.7, 82.0) NetApp growth, despite continued HDS challenges in Japan resulting Average Corporate Revenue 20.0% EMC Intel Average APAC Revenue Growth for Segment =12.8% from the natural disaster Lenovo AMD Growth = 21.2% during 1Q11. CorporateRevenue Growth 10.0% IBM Fujitsu• PC and mobile device vendors Toshiba HP such as Apple leveraged Oracle/Sun Panasonic 0.0% Sony Dell strong demand in China. -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%• Japan-based vendors -10.0% leveraged outsourcing to reduce their operating expenses, freeing up capital -20.0% to develop products in Acer growing business areas. -30.0%• Vendors based externally APAC Revenue Growth SOURCE: TBR worked to expand their channel presence in growing countries. NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.32 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: APAC TBRHardware vendors are investing in R&D and the channel to capitalize ondemand in growing countries within APACAPAC Revenue LeadersCompany Size Key Strategy Drivers & Changes Revenue in Asia Pacific fell to $15.04 billion in Restructure, eliminating country-specific sales $18.3 2Q11 from $17.92 billion in 2Q10 as a result ofPanasonic teams and creating regional sales and marketing billion decreased consumer spending following the headquarters to foster growth in APAC. disaster in Japan. Prioritize investments in new and growing Revenue in Japan rose 7.6% YTY in 2Q11, $11Toshiba business areas, such as transmission & representing 43.6% of revenue, driven by PC billion distribution, to promote expansion in Asia. sales and Home Appliances. Leverage higher-value product differentiation and Continued efforts to repair damage from the $10.1Sony target efficient resource planning to maximize cost earthquake resulted in an 18.6% increase in billion savings and increase APAC growth and revenue. Japan sales, offsetting the 6.3% decline in APAC.Asia Pacific Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes Leverage alliances to foster growth, particularly in Asia Pacific revenue grew 179.7% year-to-yearApple 179.7% Greater China, through stronger carrier presence in 2Q11 driven by demand for smartphones and and an expanded base of retail outlets. tablets in emerging markets, such as China. Seek expanded channel and direct sales footprint APAC revenue grew 36.9% from 2Q10 to $190 to increase APAC revenue while leveraging million, as NetApp leveraged Engenio’s OEMNetApp 37.7% partners to create new applications for its storage channel, as well as prior restructuring initiatives solutions in cloud and virtualization markets. for strengthened execution. Leverage a solutions approach to capitalize on an TBR attributes HDS’ double-digit APAC revenueHDS 26.6% industry shift toward cloud-based and sustainable growth to demand for data protection, datacenters in APAC countries, particularly Japan. virtualization and cloud-enabling solutions.33 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Geographic View: APAC TBRVendors will capitalize on the growing IT markets of China and India in2H11, as demand in Japan following the natural disaster remains weakTrends & Outlook• Vendors leveraged demand in growing countries, namely China and India, to offset challenges in Japan following natural disaster in March. Demand for PCs and smartphones was particularly strong in China, and India will be a key focus for vendors looking to capture emerging market share throughout east Asia via channel partnerships.• In light of power supply issues throughout Japan, PC makers such as Panasonic and Toshiba are delivering eco- centric product lines and unveiling “green” micro-technology to reduce grid power consumption and appeal to customers in the world’s third-largest PC market. TBR believes enterprise hardware vendors will also adopt a similar strategy, working to develop technology that will enable more efficient datacenter environments.Portfolio/GTM & RM Changes Key 2Q11 M&As, Alliance Changes & DealsCompany TBR Insights Company TBR Insights Panasonic will rebuild and recover revenue TBR believes Apple and China Mobile’s growth in Japan by emphasizing a green planned partnership to bring the iPhone toPanasonic technology strategy with energy solutions to Apple China Mobiles network will drive APAC drive sales, as energy conservation remains a growth as China Mobile is the largest cell top priority in the country. phone carrier in China. IBM opened offices in Coimbatore, India, as well Lenovo partnered with NEC to leverage NEC’s as Senegal and Tanzania, to address the needs established customer base, brand recognitionIBM Lenovo of SMBs and governments in smaller cities and and cultural affiliation to drive expanded sales rural areas. opportunities in Japan. In July, Fujitsu allied with Siemens to Toshiba announced a 75% equity stake in capitalize on demand from telcos in India by TopRank Corporation that will allow Toshiba to Fujitsu developing scalable unified communicationsToshiba promote the expansion of its transmission and platforms and VoIP networks, wrapped with distribution sector in Asian markets. Fujitsu services.34 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Revenue TBRHP customer uncertainty may lead to Apple surpassing HP in totalrevenue in 2H11 SOURCE: TBR AND COMPANY DATA TBR REVENUE (IN $ MILLIONS) RANKING TBR SCORE COMPANY TOP 3 COMPANIES $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 1 8.55 HP $31,189 2 8.04 APPLE $28,571 3 7.66 IBM $26,666 $23,654 4 7.07 PANASONIC 5 5.97 SONY $18,047 $16,256 6 5.62 TOSHIBA 7 5.50 DELL $15,658 Top Ranking Analysis HP posted the highest total revenue $13,032 among hardware vendor peers for the 8 4.98 INTEL third consecutive quarter, up 1.5% year-to-year to $31.2 billion in 2Q11. 9 4.80 FUJITSU $12,088 TBR believes the companys transformation of its product strategy 10 3.59 LENOVO $5,920 will foster customer uncertainty in 2H11, creating opportunities for Apple $4,845 to win wallet share in the consumer PC 11 3.37 EMC space and IBM to win wallet sharein the enterprise space. 12 3.12 ACER $3,533 13 2.78 ORACLE/SUN $1,829 2Q11 Average = $12,834 14 2.73 AMD $1,574 2Q11 Standard Deviation = $10,506 15 2.71 NETAPP $1,458 2Q11 1Q11 16 2.62 HDS $1,017 AVERAGE35 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Revenue Growth TBRContinued demand for iPad 2 and global iPhone sales will keep Appleahead of peers in year-to-year revenue growth TBR REVENUE YEAR-TO-YEAR CHANGE RANKING TBR SCORE COMPANY -50.0% -30.0% -10.0% 10.0% 30.0% 50.0% 70.0% 90.0% TOP 3 COMPANIES 1 10.00 APPLE 82.0% 26.7% 2 6.24 HDS 26.4% 3 6.22 NETAPP 4 5.73 INTEL 21.1% Top Ranking Analysis Apple posted the strongest year-to-year corporate 5 5.67 EMC 20.4% revenue growth among peers, up 82.0% YTY to 15.0% $28.6 billion, for a fifth consecutive quarter in 6 5.17 LENOVO 2Q11. Though Mac sales growth started to slow Peaches1012 during 2Q11, iPad revenue increased from 11.5% 7 4.97 AMD 12.8% of Apples total revenue in 1Q11 to comprise 21.2% of Apple’s 2Q11 revenue, driven by strong 12.4% demand in mature markets and accelerated 8 4.93 IBM restocking cycles for iPad 2 inventory. TBR expects 6.4% Apple to maintain future growth by leveraging 9 4.38 FUJITSU product refresh cycles to sustain iPhone and iPad 3.2% sales momentum. 10 4.09 TOSHIBA 1.5% SOURCE: TBR AND COMPANY DATA 11 3.93 HP 0.9% 2Q11 Average = 12.8% 12 3.87 PANASONIC 2Q11 Standard Deviation = 22.4% 0.8% 2Q11 13 3.86 DELL 0.1% 1Q11 14 3.80 SONY AVERAGE -0.1% 15 3.78 ORACLE/SUN 16 1.56 ACER -24.1%36 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Gross Margin TBRNetApp’s gross margin will be muted by slowing growth, potentiallycausing the vendor to lose its leadership in gross margin in 3Q11TBR GROSS MARGIN RANKING TBR SCORE COMPANY 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% TOP 3 COMPANIES 61.5% 1 7.79 NETAPP 60.6% 2 7.69 INTEL 59.4% 3 7.55 EMC 55.3% 4 7.08 ORACLE/SUN 48.0% Top Ranking Analysis 5 6.24 HDS NetApp maintained the top 46.4% position amoung industry peers 6 6.06 IBM in terms of gross margin. 45.7% However, TBR anticipates the 7 5.98 AMD vendor will face headwinds in 41.7% future quarters. Its gross margin 8 5.52 APPLE declined 250 basis points YTY in 34.9% 2Q11 as a result of rising COGS 9 4.73 SONY and lower‐margin Engenio 26.8% products. TBR anticipates 10 3.81 FUJITSU continued margin declines for NetApp in 3Q11, due to 24.6% 11 3.55 PANASONIC heightened investment in sales SOURCE: TBR AND COMPANY DATA and marketing and R&D for 12 3.42 TOSHIBA 23.4% growth and contributions of less profitable Engenio offerings. HP 23.3% 13 3.40 22.5% 2Q11 Average = 36.9% 14 3.31 DELL 2Q11 Standard Deviation = 18.1% 12.5% 2Q11 15 2.17 LENOVO 1Q11 16 1.09 ACER 3.1% AVERAGE37 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Operating Margin TBRThe combination of strong revenue growth with a stable cost structurewill render Apple a strong competitor in operating margin in 2H11TBRRANKING TBR SCORE COMPANY OPERATING MARGIN TOP 3 COMPANIES -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 1 9.18 APPLE 32.8% 30.2% 2 8.70 INTEL 3 6.63 IBM 19.1% 15.4% 4 5.95 EMC Top Ranking Analysis Appl e ousted Intel from the top s pot i n 12.1% terms of operating margin as compared 5 5.34 NETAPP to ha rdware vendor peers. Apples 10.5% opera ting margin i ncreased from 31.9% 6 5.05 HDS i n 1Q11 to 32.8% i n 2Q11, a s Apple’s 8.1% revenue growth continued to outpace 7 4.59 HP cos t i ncreases. As Apple introduces new product updates and continues to 8 4.45 DELL 7.3% penetrate new markets with iPhone, TBR believes the company will be a ble 9 4.34 AMD 6.7% to s us tain its growth trend a nd 2.2% ma i ntain a n operating margin above 10 3.50 SONY 35% i nto 2012. 2.1% 11 3.48 LENOVO SOURCE: TBR AND COMPANY DATA 0.3% 12 3.15 TOSHIBA 0.3% 13 3.15 PANASONIC 2Q11 Avera ge = 8.6% -0.3% 2Q11 Sta ndard Deviation = 11.2% 14 3.04 ORACLE/SUN 2Q11 -1.7% 15 2.77 FUJITSU 1Q11 -6.9% 16 1.80 ACER AVERAGE38 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: SG&A Expense TBRApple’s strong revenue growth will keep its SG&A as a percentage ofrevenue low, enabling the vendor to lead industry peers going forward SG&A AS A % OF REVENUE TBR RANKING TBR SCORE COMPANY 0.0% 10.0% 20.0% 30.0% 40.0% TOP 3 COMPANIES APPLE 6.7% 1 7.54 Top Ranking Analysis 8.8% Though Apples SG&A expense rose 33.2% 2 7.09 LENOVO year-to-year to $1.91 billion, the company maintained the smallest level of SG&A 3 6.89 ACER 9.7% expense as a percentage of total revenue 10.9% compared to peers. TBR believes Apple 4 6.63 HP continued to grow G&A headcount in 2Q11 to support expansion into new regions. We 13.9% 5 5.99 DELL anticipate Apple will invest in advertising and marketing expenditures around the iPad in 14.6% 6 5.83 INTEL 2H11, but expect resulting growth to offset 15.0% these investments. 7 5.75 SONY 15.2% 8 5.70 AMD 17.4% 9 5.22 PANASONIC 10 5.13 TOSHIBA 17.9% 2Q11 Average = 18.9% SOURCE: TBR AND COMPANY DATA 22.6% 2Q11 Standard Deviation = 9% 11 4.10 IBM 2Q11 12 4.07 FUJITSU 22.8% 1Q11 13 3.49 ORACLE/SUN 25.5% AVERAGE 32.5% 14 1.97 EMC 33.0% 15 1.85 HDS 35.7% 16 1.28 NETAPP39 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: R&D Expense TBRAcer’s continued efforts to strategically hone R&D spend will keep themetric low as a percentage of revenue in future quartersTBR R&D EXPENSE AS A % OF REVENUE RANKING TBR SCORE COMPANY 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% TOP 3 COMPANIES 0.3% 1 7.32 ACER 1.3% 2 6.99 LENOVO Top Ranking Analysis Acer reported the l owest R&D expense as 3 6.99 DELL 1.3% a percentage of total revenue compared to ha rdware vendor peers for the third 4 6.70 APPLE 2.2% cons ecutive quarter. TBR believes Acer 2.6% wi l l work to balance investment in the 5 6.56 HP development of smartphones and tablets to ca pi talize on demand with revenue 6 5.97 HDS 4.4% growth to ma intain this competitive metri c going forward. 5.3% 7 5.69 TOSHIBA 5.8% 8 5.52 FUJITSU 2Q11 Avera ge = 7.5% 2Q11 Sta ndard Deviation = 6.4% 5.9% 9 5.49 IBM 2Q11 SOURCE: TBR AND COMPANY DATA 6.4% 10 5.31 SONY 1Q11 6.9% AVERAGE 11 5.17 PANASONIC 11.1% 12 3.78 EMC 13.6% 13 2.96 NETAPP 14.8% 14 2.58 ORACLE/SUN 15.2% 15 2.42 INTEL 23.3% 16 0.00 AMD40 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Revenue Per Salesperson TBRIntel’s extensive use of the channel will enable the vendor to continue tooutperform industry peers in revenue per salesperson in 2H11 TBR ANNUAL REVENUE PER SALESPERSON (IN $ MILLIONS) RANKING TBR SCORE COMPANY TOP 3 COMPANIES $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 1 10.00 INTEL $34,021 2 6.85 ACER $14,145 $10,026 3 5.91 AMD Top Ranking Analysis Intel posted a n a nnual revenue per $6,013 4 4.99 LENOVO s a lesperson metric of $34.0 mi llion in 2Q11, a cheiving the top position among its i ndustry $5,128 5 4.79 APPLE peers. TBR estimates sales and marketing hea dcount grew 35.7% yea r-to-year, as Intel $3,529 conti nued to ra mp channel sales efforts 6 4.42 DELL a cros s the globe a nd promote new products, $3,137 whi ch was largely offset by 21.1% YTY 7 4.33 HP growth. Intel will continue to Ieverage a 8 4.16 SONY $2,375 broa d channel program to cost-effectively i ncrease its sales reach a nd foster revenue $2,163 growth. 9 4.11 HDS $2,158 10 4.11 EMC SOURCE: TBR AND COMPANY DATA 2Q11 Avera ge = $5,799 $2,098 11 4.09 PANASONIC 2Q11 Sta ndard Deviation = $8,315 $1,972 2Q11 12 4.07 FUJITSU 1Q11 $1,697 13 4.00 NETAPP AVERAGE $1,689 14 4.00 TOSHIBA $1,335 15 3.92 ORACLE/SUN $1,304 16 3.91 IBM41 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Revenue Per Employee TBRAcer will be challenged to maintain industry-leading revenue peremployee metrics due to weak corporate revenue growth TBR ANNUAL REVENUE PER EMPLOYEE (IN $ THOUSANDS) RANKING TBR SCORE COMPANY $0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200 TOP 3 COMPANIES $2,699 1 10.00 ACER $1,985 2 8.71 APPLE $865 3 5.43 HDS $839 4 5.36 LENOVO Top Ranking Analysis $609 Acers a nnual revenue per employee dropped a 5 4.68 DELL s i gnificant 10.9% year-to year to $2.7 mi llion, a s corpora te revenue fell due primarily to i ncreased 6 4.61 $583 AMD competition i n the PC ma rket. Acer’s headcount grew 0.4% on a yea r-to-year basis to 6,625 employees i n $547 2Q11; however, the company plans to reduce 7 4.50 INTEL hea dcount i n EMEA i n coming quarters to foster margin $521 protecti on by l owering operating expenses. 8 4.42 NETAPP $494 9 4.35 SONY $407 10 4.09 SOURCE: TBR AND COMPANY DATA ORACLE/SUN $401 11 4.07 HP 2Q11 Avera ge = $720 2Q11 Sta ndard Deviation = $670 $371 12 3.99 TOSHIBA 2Q11 $364 13 3.97 EMC 1Q11 $312 AVERAGE 14 3.81 FUJITSU $273 15 3.70 PANASONIC $253 16 3.64 IBM42 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Headcount Growth TBRJapan-based companies will continue to post industry-leading headcountgrowth, as they restructure to offset the effects of the natural disasterTBR HEADCOUNT GROWTH YEAR-TO-YEARRANKING TBR SCORE COMPANY -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% TOP 3 COMPANIES -4.9% 1 6.75 PANASONIC -0.5% 2 6.14 TOSHIBA Top Ranking Analysis Pa na sonics headcount fell 4.9% yea r-to-year in -0.3% 3 6.12 FUJITSU 2Q11 i n a n effort to cut costs a fter l osses i n revenue due to natural disaster i n Japan, 0.0% di fficulties in i ts television business, and 4 6.07 ORACLE/SUN a ppreciation of the Japanese yen. TBR does not 0.2% expect headcount to increase s ubstantially i n 5 6.05 SONY 3Q11, a s the company continues reacting to 0.4% l osses s ustained in 1H11. 6 6.02 ACER 4.5% 7 5.46 AMD 2Q11 Avera ge = 8.7% 4.7% 2Q11 Sta ndard Deviation = 10.7% 8 5.43 IBM 6.5% 2Q11 9 5.18 LENOVO 6.6% 1Q11 10 5.18 HP SOURCE: TBR AND COMPANY DATA AVERAGE 7.6% 11 5.03 DELL 16.7% 12 3.79 HDS 20.8% 13 3.23 INTEL 23.7% 14 2.83 NETAPP 25.8% 15 2.54 EMC 27.8% 16 2.27 APPLE43 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Return on Assets TBRApple will leverage continued iPhone and iPad success to maintain itssignificant lead over peers in ROATBR RETURN ON ASSETSRANKING TBR SCORE COMPANY -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% TOP 3 COMPANIES 26.0% 1 10.00 APPLE 19.0% 2 8.20 INTEL 17.8% 3 7.85 AMD 14.0% 4 6.76 IBM 12.7% 5 6.42 ORACLE/SUN 9.1% Top Ranking Analysis 6 5.38 DELL Appl es ROA grew 170 basis points 8.0% yea r-to-year to 26.0%, ma intaining its 7 5.07 NETAPP l ead over hardware vendor peers for 7.6% the thi rd consecutive quarter. Apples 8 4.95 HP net i ncome grew 124.7% yea r-to-year 7.0% a nd i ts total asset base grew by 64.9%, 9 4.78 EMC dri ven by s ales of high-margin mobile 2.9% devi ces, s uch as the i Phone 4. TBR expects the next i teration of the SOURCE: TBR AND COMPANY DATA 10 3.62 LENOVO 2.6% i Phone will help s ustain the trend of a s trong ROA i n 2H11. 11 3.52 TOSHIBA 1.7% 12 3.26 HDS 1.3% 13 3.15 FUJITSU 0.1% 2Q11 Avera ge = 7.6% 14 2.83 ACER 2Q11 Sta ndard Deviation = 8.5% -2.4% 2Q11 1Q11 AVERAGE 15 2.10 SONY -5.2% 16 1.31 PANASONIC44 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Financial Metrics: Return on Equity TBRIBM may capitalize on AMD’s declining ROE metric, resulting from theloss of favorable year-to-year compares and investment for growthTBR RETURN ON EQUITY RANKING TBR SCORE COMPANY -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 65.0% 75.0% TOP 3 COMPANIES 73.7% 1 7.17 AMD 2 6.92 IBM 68.2% 3 5.92 DELL 45.8% 40.5% 4 5.68 APPLE Top Ranking Analysis 27.6% AMD rema i ned the l eader among 5 5.10 TOSHIBA CBQ peers in terms of ROE. The compa ny i ncreased R&D expense i n 25.1% 6 4.99 INTEL 2Q11, ca us ing a slight ROE decline from the previous quarter. TBR 24.3% a nti cipates AMDs trend of declining 7 4.96 ORACLE/SUN ROE, a s i t invests to spur growth, in 23.0% 2H11 wi l l open doors for IBM to 8 4.90 HP s urpass AMD and lead hardware 18.4% vendor peers i n the ROE metric. 9 4.69 LENOVO 17.9% 10 4.67 NETAPP SOURCE: TBR AND COMPANY DATA 11.8% 11 4.40 EMC 10.7% 12 4.35 HDS 4.3% 2Q11 Avera ge = 22.9% 13 4.06 FUJITSU 2Q11 Sta ndard Deviation = 24.8% 0.4% 14 3.88 ACER 2Q11 -11.4% 1Q11 15 3.36 SONY -14.4% AVERAGE 16 3.22 PANASONIC45 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Total OPEX TBRTBR TOTAL OPERATING EXPENSE AS A % OF REVENUE RANKING TBR SCORE COMPANY 0.0% 20.0% 40.0% 60.0% TOP 3 COMPANIES 8.9% 1 7.75 APPLE 10.0% 2 7.58 ACER 10.4% 3 7.53 LENOVO 2Q11 Average = 28.3% 2Q11 Standard Deviation = 14.3% 15.2% 4 6.81 HP 2Q11 15.2% 5 6.81 DELL 1Q11 23.1% AV ERAGE 6 5.62 TOSHIBA 24.3% 7 5.44 PANASONIC 28.5% 8 4.81 IBM 28.6% 9 4.80 FUJITSU 30.4% 10 4.52 INTEL SOURCE: TBR AND COMPANY DATA 32.9% 11 4.15 SONY 37.5% 12 3.47 HDS 38.5% 13 3.31 AMD 44.1% 14 2.47 EMC 49.4% 15 1.67 NETAPP 16 0.74 ORACLE/SUN 55.6%46 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Net Margin TBRTBR NET MARGIN RANKING TBR SCORE COMPANY -25.0% -15.0% -5.0% 5.0% 15.0% 25.0% 35.0% TOP 3 COMPANIES 1 8.53 APPLE 25.6% 22.7% 2 7.97 INTEL 2Q11 Average = 5.9% 3 6.26 IBM 13.7% 2Q11 Standard Deviation = 9.4% 2Q11 11.3% 4 5.79 EMC 1Q11 9.6% 5 5.46 NETAPP AVERAGE 8.7% 6 5.28 HDS 7.8% 7 5.12 AMD 6.2% 8 4.81 HP 5.7% SOURCE: TBR AND COMPANY DATA 9 4.71 DELL 10 3.97 LENOVO 1.8% 11 3.63 TOSHIBA 0.0% 12 3.42 SONY -1.0% -1.6% 13 3.32 PANASONIC 14 3.22 FUJITSU -2.1% -6.6% 15 2.35 ACER 16 2.21 ORACLE/SUN -7.4%47 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Gross Profit YTY TBRTBR GROSS PROFIT YEAR-TO-YEAR CHANGE RANKING TBR SCORE COMPANY -80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% TOP 3 COMPANIES 1 10.00 APPLE 94.3% 2 8.68 INTEL 60.6% 41.2% 3 6.96 LENOVO 2Q11 Average = 17.7% 2Q11 Standard Deviation = 35.7% 36.3% 4 6.53 DELL 2Q11 23.1% 5 5.36 AMD 1Q11 AVERAGE 22.1% 6 5.27 EMC 21.9% 7 5.25 HDS 21.6% 8 5.23 NETAPP 19.1% 9 5.00 ORACLE/SUN 14.6% 10 4.61 IBM 6.4% 11 3.89 TOSHIBA SOURCE: TBR AND COMPANY DATA 5.1% 12 3.77 SONY 3.8% 13 3.65 FUJITSU -1.4% 14 3.19 HP -9.3% 15 2.50 PANASONIC -76.5% 16 0.00 ACER48 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: SG&A YTY TBRTBR SG&A YEAR-TO-YEAR CHANGE RANKING TBR SCORE COMPANY -50.0% -25.0% 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% TOP 3 COMPANIES -4.4% 1 6.68 SONY 1.9% 2 6.11 PANASONIC 4.4% 3 5.89 ACER 4.4% 4 5.89 AMD 2Q11 Average = 17.1% 6.6% 2Q11 Standard Deviation = 12.3% 5 5.69 HP 12.2% 6 5.18 ORACLE/SUN 2Q11 14.0% 7 5.01 FUJITSU 1Q11 18.7% AVERAGE 8 4.59 TOSHIBA 19.1% 9 4.55 IBM 20.3% 10 4.45 INTEL 22.8% SOURCE: TBR AND COMPANY DATA 11 4.22 EMC 24.9% 12 4.02 HDS 26.7% 13 3.86 NETAPP 29.5% 14 3.61 DELL 33.2% 15 3.27 APPLE 39.5% 16 2.70 LENOVO49 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: R&D YTY TBR TBR R&D EXPENSE YEAR-TO-YEAR CHANGE RANKING TBR SCORE COMPANY -20.0% 0.0% 20.0% 40.0% TOP 3 COMPANIES -1.1% 1 6.51 AMD 0.0% 2 6.39 HDS 0.9% 3 6.30 LENOVO 6.4% 4 5.70 IBM 8.0% 5 5.53 SONY 8.0% 6 5.53 ORACLE/SUN 9.4% 2Q11 Average = 14% 2Q11 Standard Deviation = 11.2% 7 5.37 HP 2Q11 11.4% 8 5.16 TOSHIBA 1Q11 11.7% AV ERAGE 9 5.12 PANASONIC 12.8% 10 5.01 EMC SOURCE: TBR AND COMPANY DATA 16.2% 11 4.63 FUJITSU 19.2% 12 4.31 INTEL 25.7% 13 3.62 ACER 26.5% 14 3.52 DELL 32.8% 15 2.84 NETAPP 35.3% 16 2.57 APPLE50 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: OPEX YTY TBR TBR TOTAL OPERATING EXPENSE YEAR-TO-YEAR CHANGE RANKING TBR SCORE COMPANY -30.0% 0.0% 30.0% 60.0% 90.0% TOP 3 COMPANIES -6.0% 1 7.08 HP 2 6.28 AMD 1.0% 4.5% 3 5.87 PANASONIC 4 5.82 ACER 4.9% 10.4% 2Q11 Avera ge = 16.2% 5 5.20 SONY 2Q11 Standard Deviation = 11.8% 10.6% 6 5.17 APPLE 2Q11 14.5% 1Q11 7 4.73 FUJITSU AVERAGE 16.3% SOURCE: TBR AND COMPANY DATA 8 4.52 IBM 17.0% 9 4.44 TOSHIBA 20.6% 10 4.02 EMC 21.3% 11 3.94 HDS 21.9% 12 3.87 INTEL 25.3% 13 3.49 ORACLE/SUN 28.7% 14 3.09 NETAPP 29.2% 15 3.03 DELL 39.3% 16 1.87 LENOVO51 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Operating Income YTY TBR OPERATING INCOME YEAR-TO-YEAR CHANGETBR RANKING TBR SCORE COMPANY -800% -400.0% -300.0% -200.0% -100.0% 0.0% 100.0% 200.0% TOP 3 COMPANIES 121.5% 1 5.12 APPLE 94.5% 2 5.08 HDS 53.8% 3 5.03 DELL 2Q11 Avera ge = -35.5% 2Q11 Standard Deviation = 118.8% 51.4% 4 5.02 LENOVO 2Q11 26.6% 5 4.99 EMC 1Q11 AVERAGE 11.2% 6 4.97 IBM SOURCE: TBR AND COMPANY DATA 8.5% 7 4.96 HP -0.8% 8 4.95 NETAPP 9 4.95 INTEL -1.2% -16.0% 10 4.93 AMD -40.4% 11 4.89 SONY -86.2% 12 4.83 TOSHIBA -754.4% -92.5% 13 4.82 PANASONIC -113.2% 14 4.79 ORACLE/SUN -291.3% 15 4.55 ACER -293.6% 16 4.54 FUJITSU52 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Net Income YTY TBRTBR NET INCOME YEAR-TO-YEAR CHANGERANKING TBR SCORE COMPANY -1,600% -600.0% -500.0% -400.0% -300.0% -200.0% -100.0% 0.0% 100.0% 200.0% 300.0% 400.0% TOP 3 COMPANIES 1 4.93 AMD 383.7% 2 4.80 APPLE 124.7% 120.0% 3 4.80 HDS 98.3% 4 4.79 LENOVO 2Q11 Avera ge = -92.1% 63.3% 5 4.77 DELL 2Q11 Sta ndard Deviation = 408.4% 2Q11 28.2% 6 4.75 EMC 1Q11 14.0% 7 4.74 TOSHIBA AVERAGE 8.6% 8 4.74 HP 8.3% 9 4.74 IBM 2.3% 10 4.74 INTEL SOURCE: TBR AND COMPANY DATA -7.4% 11 4.73 NETAPP -144.0% 12 4.66 ORACLE/SUN -178.5% 13 4.65 PANASONIC -180.7% 14 4.65 SONY -309.1% 15 4.58 ACER -1,505.0% 16 3.97 FUJITSU53 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Cost per Revenue Dollar TBRTBR COST PER REVENUE DOLLARRANKING TBR SCORE COMPANY $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20 $0.22 $0.24 TOP 3 COMPANIES 1 6.79 ORACLE/SUN $0.02 2 6.68 INTEL $0.03 $0.03 3 6.63 APPLE $0.03 4 6.63 LENOVO 2Q11 Average = $0.09 $0.04 2Q11 Standard Deviation = $0.07 5 6.36 ACER 2Q11 $0.04 6 6.33 AMD 1Q11 $0.05 AVERAGE 7 6.16 HP $0.05 8 5.90 SONY 9 5.58 TOSHIBA $0.07 10 5.47 PANASONIC $0.07 SOURCE: TBR AND COMPANY DATA 11 5.14 DELL $0.08 $0.12 12 4.07 FUJITSU 13 3.98 IBM $0.12 14 2.03 HDS $0.18 15 0.95 EMC $0.22 16 0.95 NETAPP $0.2254 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Cost per Margin Dollar TBRTBR COST PER MARGIN DOLLARRANKING TBR SCORE COMPANY $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $1.10 $1.20 $1.30 TOP 3 COMPANIES $0.04 1 8.23 ORACLE/SUN $0.05 2 8.20 INTEL $0.07 3 7.84 APPLE $0.08 4 7.69 AMD $0.16 5 6.52 SONY 2Q11 Average = $0.3 $0.20 2Q11 Standard Deviation = $0.29 6 5.89 HP 2Q11 $0.26 7 4.97 IBM 1Q11 $0.26 AV ERAGE 8 4.91 LENOVO $0.28 9 4.64 TOSHIBA SOURCE: TBR AND COMPANY DATA $0.28 10 4.60 PANASONIC $0.36 11 3.37 NETAPP $0.37 12 3.21 DELL $0.37 13 3.21 EMC $0.38 14 3.01 HDS $0.43 15 2.26 FUJITSU $1.26 16 0.00 ACER55 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Channel Expense TBRTBR CHANNEL EXPENSE AS A % OF SALES & MARKETING EXPENSE RANKING TBR SCORE COMPANY 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% TOP 3 COMPANIES 1.8% 1 7.28 EMC 2.8% 2 7.17 INTEL 5.4% 3 6.87 DELL 6.1% 4 6.79 AMD 2Q11 Average = 22.8% 9.0% 5 6.46 NETAPP 2Q11 Standard Deviation = 19.9% 14.3% 2Q11 6 5.86 PANASONIC 1Q11 18.7% 7 5.36 SONY AVERAGE 19.3% SOURCE: TBR AND COMPANY DATA 8 5.29 IBM 19.8% 9 5.24 FUJITSU 21.4% 10 5.05 HP 27.5% 11 4.35 TOSHIBA 29.9% 12 4.08 HDS 30.0% 13 4.07 LENOVO 36.1% 14 3.38 ACER 38.8% 15 3.07 APPLE 83.4% 16 0.00 ORACLE/SUN56 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Marketing Expense TBRTBR MARKETING EXPENSE AS A % OF SALES & MARKETING EXPENSERANKING TBR SCORE COMPANY 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% TOP 3 COMPANIES EMC 2.3% 1 7.76 2 7.27 ORACLE/SUN 6.5% 10.0% 3 6.87 HDS 16.8% 4 6.07 ACER 2Q11 Average = 26.5% 2Q11 Standard Deviation = 17.7% 17.3% 5 6.02 FUJITSU 2Q11 19.1% 6 5.81 IBM 1Q11 19.5% AVERAGE 7 5.76 DELL 20.9% 8 5.60 NETAPP 21.6% 9 5.52 HP SOURCE: TBR AND COMPANY DATA 25.4% 10 5.08 TOSHIBA 25.8% 11 5.03 SONY 29.4% 12 4.61 PANASONIC 44.3% 13 2.89 APPLE 45.6% 14 2.73 LENOVO 48.9% 15 2.35 AMD 70.0% 16 0.00 INTEL57 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Marketing Expense per Employee TBR TBR ANNUAL MKTG. EXPENSE PER MKTG. EMPLOYEE (IN $ THOUSANDS) RANKING TBR SCORE COMPANY $0 $100 $200 $300 $400 $500 $600 $700 TOP 3 COMPANIES $124 1 7.26 PANASONIC $144 2 7.00 ORACLE/SUN $144 3 7.00 APPLE $175 2Q11 Avera ge = $311 4 6.58 TOSHIBA 2Q11 Sta ndard Deviation = $149 $194 2Q11 5 6.31 SONY $227 1Q11 6 5.87 FUJITSU $255 AVERAGE 7 5.49 EMC $262 8 5.40 HDS $295 9 4.96 DELL SOURCE: TBR AND COMPANY DATA $347 10 4.25 AMD $354 11 4.16 HP $366 12 4.00 ACER $462 13 2.71 LENOVO $486 14 2.39 IBM $534 15 1.73 NETAPP $605 16 0.77 INTEL58 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Days Sales Outstanding TBRTBR DAYS SALES OUTSTANDINGRANKING TBR SCORE COMPANY 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 TOP 3 COMPANIES 1 8.56 APPLE 19.22 2 8.06 INTEL 23.20 2Q11 Average = 49.05 3 7.79 LENOVO 25.36 2Q11 Standard Deviation = 17.75 4 6.35 NETAPP 36.85 2Q11 39.37 1Q11 5 6.04 IBM AVERAGE 43.40 6 5.53 AMD 47.23 7 5.05 SONY 8 4.96 PANASONIC 47.94 SOURCE: TBR AND COMPANY DATA 9 4.87 EMC 48.67 10 4.42 HP 52.29 11 4.03 ORACLE/SUN 55.40 12 3.67 DELL 58.27 13 2.67 FUJITSU 66.25 67.48 14 2.52 TOSHIBA 76.29 15 1.42 HDS 77.56 16 1.26 ACER59 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Turns on Inventory TBR TURNS ON INVENTORYTBR RANKING TBR SCORE COMPANY 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 TOP 3 COMPANIES 73.22 1 10.00 APPLE 41.65 2 8.05 IBM 36.06 3 7.32 DELL 27.87 4 6.26 ORACLE/SUN 23.83 5 5.73 LENOVO 20.95 6 5.35 NETAPP 13.48 7 4.38 HP 2Q11 Average = 18.6 10.90 8 4.04 FUJITSU 2Q11 Standard Deviation = 18.75 9.80 2Q11 9 3.90 ACER 1Q11 SOURCE: TBR AND COMPANY DATA 8.16 10 3.69 EMC AVERAGE 5.96 11 3.40 PANASONIC 5.73 12 3.37 TOSHIBA 5.30 13 3.31 AMD 5.13 14 3.29 SONY 5.05 15 3.28 INTEL 4.54 16 3.21 HDS60 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Days Inventory Outstanding TBRTBR DAYS INVENTORY OUTSTANDING RANKING TBR SCORE COMPANY 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 TOP 3 COMPANIES 4.98 1 7.72 APPLE 8.76 2 7.40 IBM 10.12 3 7.28 DELL 13.10 2Q11 Average = 39.36 4 7.03 ORACLE/SUN 2Q11 Standard Deviation = 26.52 15.32 5 6.84 LENOVO 2Q11 17.42 1Q11 6 6.66 NETAPP SOURCE: TBR AND COMPANY DATA 27.08 AVERAGE 7 5.85 HP 33.48 8 5.30 FUJITSU 9 4.77 ACER 39.84 44.73 10 4.35 EMC 58.47 11 3.19 PANASONIC 63.66 12 2.75 TOSHIBA 68.92 13 2.30 AMD 71.11 14 2.12 SONY 72.30 15 2.02 INTEL 80.43 16 1.33 HDS61 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Fixed Asset Turnover TBRTBR FIXED ASSET TURNOVER RANKING TBR SCORE COMPANY 0.00 20.00 40.00 60.00 80.00 100.00 120.00 TOP 3 COMPANIES 1 10.00 LENOVO 112.64 2 8.22 ACER 59.36 30.34 3 5.93 DELL 17.60 4 4.93 APPLE ORACLE/SUN 14.99 5 4.72 6 4.37 HP 10.46 7 4.27 AMD 9.25 2Q11 Average = 18.62 2Q11 2Q10 Average Standard Deviation = 28.93 8 4.12 EMC 7.36 2Q11 9 4.12 IBM 7.35 1Q11 9 4.04 SONY 6.29 AVERAGE SOURCE: TBR AND COMPANY DATA 11 4.01 TOSHIBA 5.94 12 3.87 PANASONIC 4.20 13 3.86 HDS 4.08 14 3.79 FUJITSU 3.10 15 3.74 INTEL 2.58 16 3.73 NETAPP 2.3662 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Days Cash Outstanding TBR TBR DAYS CASH OUTSTANDING RANKING TBR SCORE COMPANY 0 50 100 150 200 250 300 350 TOP 3 COMPANIES 15.22 1 6.82 TOSHIBA 31.95 2 6.41 HDS 37.38 3 6.28 HP 41.75 4 6.18 PANASONIC 44.90 5 6.10 ACER 47.55 6 6.03 FUJITSU 2Q11 Average = 86.17 53.46 2Q11 Standard Deviation = 74.83 7 5.89 INTEL 2Q11 59.28 8 5.75 LENOVO 1Q11 72.37 AVERAGE 9 5.43 EMC 73.82 10 5.40 IBM SOURCE: TBR AND COMPANY DATA 86.28 11 5.09 SONY 86.98 12 5.08 DELL 89.45 13 5.02 APPLE 106.41 14 4.60 AMD 241.00 15 1.33 ORACLE/SUN 290.95 16 0.11 NETAPP63 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Total Asset Turnover TBRTBR TOTAL ASSET TURNOVER RANKING TBR SCORE COMPANY 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20 TOP 3 COMPANIES 2.05 1 8.87 LENOVO 1.58 2 6.91 ACER 1.51 3 6.62 DELL 1.32 4 5.85 FUJITSU 1.21 5 5.38 AMD 1.13 6 5.04 APPLE 1.01 7 4.53 PANASONIC 1.00 8 4.49 HP 0.99 9 4.45 TOSHIBA 0.94 2Q11 Average = 1.05 10 4.26 IBM SOURCE: TBR AND COMPANY DATA 2Q11 Standard Deviation = 0.41 HDS 0.93 11 4.20 2Q11 0.79 1Q11 12 3.64 INTEL AVERAGE 0.69 13 3.21 NETAPP 14 2.88 ORACLE/SUN 0.61 0.61 15 2.88 EMC 0.46 16 2.26 SONY64 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Debt/Asset Ratio TBRTBR DEBT/ASSET RATIO RANKING TBR SCORE COMPANY 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 TOP 3 COMPANIES 0.23 1 9.12 INTEL 0.26 2Q11 Average = 0.61 2 8.80 APPLE 2Q11 Standard Deviation = 0.19 0.41 3 7.19 EMC 2Q11 0.45 1Q11 4 6.73 ORACLE/SUN 0.54 AV ERAGE 5 5.80 NETAPP 0.60 6 5.13 HDS 0.63 7 4.88 PANASONIC 0.64 8 4.73 DELL 0.69 9 4.23 HP 0.69 10 4.19 AMD SOURCE: TBR AND COMPANY DATA 0.70 11 4.11 ACER 0.73 12 3.75 FUJITSU 0.79 13 3.16 TOSHIBA 0.80 14 3.06 IBM 0.80 15 2.98 SONY 0.84 16 2.59 LENOVO65 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Current Ratio TBR CURRENT RATIOTBR RANKING TBR SCORE COMPANY 0.00 0.50 1.00 1.50 2.00 2.50 3.00 TOP 3 COMPANIES 2.76 1 8.62 ORACLE/SUN 2.62 2 8.20 AMD 2.23 3 7.03 INTEL 1.84 4 5.85 NETAPP 1.75 5 5.58 APPLE 1.47 6 4.73 DELL 1.25 7 4.08 ACER 1.23 8 4.00 PANASONIC 1.18 9 3.86 IBM 2Q11 Average = 1.49 1.17 2Q11 Standard Deviation = 0.58 10 3.83 FUJITSU SOURCE: TBR AND COMPANY DATA 2Q11 1.17 11 3.83 HDS 1Q11 1.15 AVERAGE 12 3.77 HP 1.09 13 3.59 TOSHIBA 1.05 14 3.47 EMC 1.00 15 3.32 LENOVO 0.90 16 3.01 SONY66 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: PC TBR TBR PC REVENUE (IN $ MILLIONS) RANKING REVENUE COMPANY $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 TOP 3 COMPANIES $8,885 1 $8,885 HP SOURCE: TBR AND COMPANY DATA $7,947 2 $7,947 DELL $5,559 3 $5,559 LENOVO $5,105 4 $5,105 APPLE $2,804 2Q11 Average = $4,308 5 $2,804 ACER 2Q11 Standard Deviation = $3,084 2Q11 $2,337 6 $2,337 TOSHIBA 1Q11 $1,618 AV ERAGE 7 $1,618 SONY $209 8 $209 PANASONIC TBR OPERATING PC OPERATING INCOME (IN $ MILLIONS) RANKING INCOME COMPANY -$250 -$150 -$50 $50 $150 $250 $350 $450 $550 $650 TOP 3 COMPANIES SOURCE: TBR AND COMPANY DATA $629 1 $629 APPLE $479 2 $479 HP $243 3 $243 DELL $128 4 $128 LENOVO 2Q11 Average = $179 $111 2Q11 Standard Deviation = $268 5 $111 SONY $58 2Q11 6 $58 TOSHIBA 1Q11 -$3 AV ERAGE 7 -$3 PANASONIC -$211 8 -$211 ACER67 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Proprietary Server TBRTBR PROPRIETARY SERVER REVENUE (IN $ MILLIONS) SOURCE: TBR AND COMPANY RANKING REVENUE COMPANY $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 TOP 3 COMPANIES $1,522 1 $1,522 IBM DATA $459 2Q11 Average = $807 2 $459 HP 2Q11 Standard Deviation = $619 $440 3 $440 ORACLE/SUN 2Q11 1Q11 AVERAGE TBR OPERATING PROPRIETARY SERVER OPERATING INCOME (IN $ MILLIONS) SOURCE: TBR AND COMPANYRANKING INCOME COMPANY -$425 -$375 -$325 -$275 -$225 -$175 -$125 -$75 -$25 $25 $75 $125 TOP 3 COMPANIES 2Q11 Average = $-95 $87 DATA 1 $87 HP 2Q11 Standard Deviation = $276 2Q11 1Q11 $40 2 $40 ORACLE/SUN AVERAGE -$413 3 -$413 IBM68 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: x86 Server TBR TBR x86 SERVER REVENUE (IN $ MILLIONS) RANKING REVENUE COMPANY $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 TOP 3 COMPANIES $3,302 1 $3,302 HP SOURCE: TBR AND COMPANY DATA $2,054 2 $2,054 DELL 2Q11 Average = $1,388 $1,516 2Q11 Standard Deviation = $1,396 3 $1,516 IBM $50 2Q11 4 $50 ORACLE/SUN 1Q11 $17 5 $17 ACER AVERAGE TBR OPERATING RANKING INCOME COMPANY x86 SERVER OPERATING INCOME (IN $ MILLIONS) TOP 3 COMPANIES -$10 $40 $90 $140 $190 $240 $290 $340 $390 $440 $490 SOURCE: TBR AND COMPANY DATA 1 $396 HP $396 2 $301 DELL $301 2Q11 Average = $156 $86 2Q11 Standard Deviation = $182 3 $86 IBM $1 2Q11 4 $1 ORACLE/SUN -$2 1Q11 5 -$2 ACER AVERAGE69 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Storage TBR TBR STORAGE REVENUE (IN $ MILLIONS) RANKING REVENUE COMPANY $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 TOP 3 COMPANIES $1,882 1 $1,882 EMC SOURCE: TBR AND COMPANY DATA $1,017 2 $1,017 HDS 2Q11 Average = $937 $976 2Q11 Standard Deviation = $494 3 $976 HP 2Q11 $966 4 $966 NETAPP 1Q11 5 $891 IBM $891 AV ERAGE 6 $502 DELL $502 7 $326 ORACLE/SUN $326TBR OPERATING STORAGE OPERATING INCOME (IN $ MILLIONS) RANKING INCOME COMPANY $0 $50 $100 $150 $200 $250 $300 TOP 3 COMPANIES $284 SOURCE: TBR AND COMPANY DATA 1 $284 IBM $230 2 $230 EMC $107 3 $107 HDS 2Q11 Average = $121 $82 2Q11 Standard Deviation = $98 4 $82 NETAPP $70 2Q11 5 $70 HP $56 1Q11 6 $56 DELL AVERAGE $15 7 $15 ORACLE/SUN70 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: Microelectronics TBRTBR MICROELECTRONICS REVENUE (IN $ MILLIONS)RANKING REVENUE COMPANY $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 TOP 3 COMPANIES $13,032 SOURCE: TBR AND COMPANY DATA 1 $13,032 INTEL $3,392 2 $3,392 TOSHIBA 2Q11 Average = $3,897 $1,574 3 $1,574 AMD 2Q11 Standard Deviation = $5,221 $920 2Q11 4 $920 SONY 1Q11 5 $567 IBM $567 AVERAGE MICROELECTRONICS OPERATING INCOME (IN $ MILLIONS)TBR OPERATING -$200 $300 $800 $1,300 $1,800 $2,300 $2,800 $3,300 $3,800 $4,300 $4,800 SOURCE: TBR AND COMPANY DATARANKING INCOME COMPANY TOP 3 COMPANIES $3,935 1 $3,935 INTEL $272 2 $272 TOSHIBA 2Q11 Avera ge = $899 $229 2Q11 Standard Deviation = $1,702 3 $229 SONY 2Q11 $105 1Q11 4 $105 AMD AVERAGE -$48 5 -$48 IBM 71 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: CBQ Taxonomy TBRFinancial Model Strategy Metrics Revenue Revenue is scored based on total revenue generated by the company. As a % of Revenue • Higher profit margins yield a higher CBQ benchmark score, with operating margin receiving the highest weight, as it demonstrates a Gross Margin company’s ability to create and bring its products to market. SG&A • Gross margin receives the second-highest weighting, as improvements Sales & Marketing in the gross margin line demonstrate higher contribution margins by the company. General & Administrative • Net margin receives a lower weighting than other margins, as there are R&D more external factors outside the control of management that do not Total Operating Expenses necessarily reflect the operations of the company’s primary business activities (such as taxes or investment gains/losses). Operating Margin • Lower SG&A, Sales & Marketing, General & Administrative, R&D and Net Margin Total Operating Expenses yield a higher CBQ benchmark score, as these Year-to-Year Change indicate lower costs incurred and higher profit generation. Revenue Gross Profit SG&A • Year-to-year change in revenue, gross profit, operating income and net income yield higher CBQ Benchmark scores. Sales & Marketing • Lower growth rates for SG&A, Sales & Marketing, General & General & Administrative Administrative, R&D and Total Operating Expenses generate a higher R&D CBQ Benchmark score. Total Operating Expenses Operating Income Net Income72 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: CBQ Taxonomy TBRGo-to-Market & Product Strategies Metrics Higher revenue per salesperson yields a higher CBQ Benchmark score, as Annual Revenue per Salesperson it indicates the revenue-generating capabilities of the company’s sales force. Cost per Revenue Dollar Cost per Revenue Dollar reflects the additional cost incurred to generate an additional dollar of revenue. Cost per Margin Dollar Cost per Margin Dollar reflects the additional cost incurred to generate an additional dollar of gross profit. • Channel Expense as a % of Revenue reflects the costs a company incurs to manage its channel programs for bringing products and services to market, based on TBR’s modeled channel expenses. Channel Expense as a % of Revenue • Marketing Expense as a % of Revenue reflects the marketing costs the Marketing Expense as a % of Revenue company has incurred, including marketing headcount costs, advertising and program expenses. The metric is based on TBR’s modeled marketing costs and advertising costs (advertising is commonly reported by most companies). Annual Sales Expense per Sales Annual Sales Expense per Sales Employee is based on TBR’s modeled sales Employee expense and sales headcount and includes direct and indirect sales staff and sales support. Annual Sales & Marketing Expense per Sales & Marketing Employee is Annual Sales & Marketing Expense per based on TBR’s modeled sales and marketing expense and headcount and Sales & Marketing Employee includes direct and indirect sales staff, sales support and marketing expense.73 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: CBQ Taxonomy TBRResource Management Strategy Metrics Lower Days Sales, Days Inventory, Days Cash and Debt/Asset ratios yield a higher CBQ Benchmark score, as: • Lower Days Sales Outstanding indicates a faster collection process, giving the company the ability to generate cash from operations and reinvest it in the business; Days Sales Outstanding • Lower Days Inventory Outstanding indicates the company is turning over product and not Days Inventory Outstanding maintaining a high inventory balance, in turn incurring higher inventory carrying costs; Days Cash Outstanding • Lower Cash Outstanding indicates a company is potentially using its cash to fund R&D, Debt/Asset Ratio mergers & acquisitions, returns to investors, etc. versus maintaining a large cash balance on its balance sheet; • Lower Debt/Asset Ratio indicates the company’s reliance on using debt for financing the business. Less debt is considered favorable for the CBQ Benchmark scoring as it indicates a company’s ability to self-fund operations, financing and investing activities. It will also result in lower operating costs, as higher debt results in higher interest payments. Higher Turns on Inventory, Fixed Asset Turnover, Total Asset Turnover, Current Ratio, Return on Assets and Return on Equity result in higher CBQ Benchmark scores, as: • Higher Turns on Inventory indicate greater demand for a company’s products and Turns on Inventory potential lower inventory carrying costs; Fixed Asset Turnover • Higher Fixed and Total Asset Turnovers indicate more efficient use of a company’s assets Total Asset Turnover in generating revenue; Current Ratio • Higher Current Ratio indicates a company’s liquidity and ability to pay its current debts Return on Assets with its current assets; Return on Equity • Higher Return on Assets and Return on Equity indicate a company’s profitability and ability to return value to shareholders.74 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: CBQ Taxonomy TBRResource Management Strategy Metrics Lower year-to-year Headcount Growth is considered favorable for CBQ Headcount Growth, year-to-year Benchmark scoring, as TBR believes lower headcount growth reflects lower increases in a company’s total expenses. Higher Annual Revenue per Employee yields a higher CBQ Benchmark score, as Annual Revenue per Employee the metric reflects the revenue-generating ability of the company’s employees versus other companies in the CBQ Benchmark. • Lower Annual G&A Expense per G&A Employee results in a higher CBQ Annual G&A Expense per G&A Employee Benchmark score, as a lower metric indicates lower costs for the company, as modeled by TBR. Annual R&D Expense per Developer • Lower R&D Expense per Developer reflects lower costs per R&D employee and generates a higher CBQ Benchmark score.75 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: CBQ Taxonomy TBRRevenue & Operating Income by IT Segment for CBQ-coveredCompaniesPC, Proprietary Servers, x86 Servers, Storage and The CBQ Benchmark ranks the companies in our five primary IT HardwareMicroelectronics Revenue and Operating Income segments, which we model from highest to lowest in revenue and operating income.76 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • Appendix: TBR Capabilities TBR TBR Consulting Capabilities Customer Views Market Views Company Views Vendor Deep-dives LOB Deep-dives Geo Deep-dives Satisfaction and Financial drill-downs, COS, Labor versus Non-labor, SG&A, G&A, OPEX, Landscape Analysis Financial Analysis drivers CAPEX, R&D, Salary & benefits, Offshore versus Onshore … Strategy analysis, Portfolio, Asset, LOB, GEO, Vertical, GTM, Client, Deal Analysis Industry Analysis Strategies & trends Delivery, Pricing, Channel, Marketing/Messaging/Value … Opportunity Structures & Acquisitions, Asset Drill-downs, Locations, Space, Products, Equipment, Geo Analysis Analysis resources IP/Patents, Software/Tools … Structure, Organization, Sales Coverage, Contracts, Deals, Span of Emerging trends Segment Analysis Business models Control, Pricing …77 TBR CBQ End-of-Quarter Benchmark Report | 2Q11 ©2011 Technology Business Research, Inc.
    • About Us Contact UsTechnology Business Research is a leading independent technology market 1.603.929.1166research and consulting firm specializing in the business and financial info@tbri.comanalyses of hardware, software, networking equipment, wireless, portal andprofessional services vendors. www.tbri.com 11 Merrill DriveServing a global clientele, TBR provides timely and accurate market research Hampton, NH 03842and business intelligence in formats that are tailored to clients’ needs. Our USAanalysts are available to further address client-specific issues or informationneeds on an inquiry or proprietary consulting basis.TBR has been empowering corporate decision makers since 1996.To learn how our analysts can address your unique business needs, pleasevisit our website or contact us today. All reports are available in PowerPoint and PDF. If you are viewing a PDF and require access to data, tables, etc. for use in internal documents, please visit our website at www.tbri.com and download the PowerPoint version. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology BusinessResearch will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not beconstrued to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected andsupplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.
    • TBRTechnology Business ResearchTechnology Business Research is a different kind of research company. Our bottoms-up approach provides a lookat the technology industry unlike anything you’ve seen before. We analyze company performance in professionalservices, networking and mobility, computing and hardware, and software on a quarterly basis, leveraging ourdata to create industry benchmarks and landscapes that provide a business perspective on leaders and laggardsand their business plans. We are experts in the business of technology. “I never go into a negotiation with a vendor until I have reviewed TBR’s quarterly reports. Understanding a vendor’s profit margin by business unit gives me an information edge in formulating my negotiation strategy and has saved my organization countless dollars!” – Telecom End User “We are using Technology Business Research’s operational metrics and management consulting taxonomy to drive our growth strategy and resources for our management consulting business…” - Top 5 Global Technology Company ©2012 Technology Business Research Inc.
    • TBRFor more information on accessing new TBR reports please contact James McIlroy at mcilroy@tbri.com or at 603-758-1813 Follow our analysts on @TBRinc Read out analysts’ commentaries at @TBRincNewsroom Watch our recorded webinars at http://www.youtube.com/user/TBRIChannel?feature=mhee ©2012 Technology Business Research Inc.