Changewave Research: Corporate IT Spending s2

ChangeWave Research: Corporate IT Spending

1Q 2012 Corporate IT Spending Trends Improved Business IT Spending Outlook – Led by Surge in Tablet Demand Jean Crumrine and Paul Carton Overview: After two consecutive quarterly declines, ChangeWave’s latest IT spending survey points to an improved corporate spending outlook for 1st Quarter 2012. ChangeWave Research is a division of The 451 Group. A total of 1,623 respondents involved with IT spending in their organization participated in the November 8-21 survey, which also focused on business demand for PCs, tablets and smart phones. 90 Day Outlook: Going forward, 16% of respondents report their company’s IT spending will increase for 1st Quarter 2012 – up 1-pt from our previous survey in August. And while 26% say their IT spending will decrease (or there will be no spending at all), that’s a 5-pt improvement from previously.

Putting these Findings in Context. As the following chart shows, this is the first spending improvement in three quarters. And while IT spending growth remains relatively weak, the net 6-pt uptick is the second biggest improvement in two years.

Importantly, the spending outlook is improving across companies of all sizes – though it remains far weaker among smaller size companies (less than 10 employees).

1st Half 2012: Looking further ahead to the entire 1st half 2012 (Jan-Jun), we also see positive signs. Nearly one-in-five (18%) think their company’s IT budget will be greater than 2nd half 2011 – a 5-pt improvement since the previous survey. But in a cautionary note, 30% believe their company’s 1st half 2012 IT budget will be less than 2nd half 2011 – which is 3-pts worse than previously. Current Quarter Spending: We also asked respondents if their IT spending was on track thus far in the 4th Quarter, and the results show a slight improvement. While a total of 14% say they’ve spent More than Planned so far in the quarter and 28% say they’ve spent Less than Planned – that’s altogether a net 3-pts better than August.

IT Categories: Of the 13 IT spending categories focused on in this survey, Networking (Change in Net Difference Score = +2), Application Development Software/Tools (+2), and Storage (+2) have registered the biggest increases since last quarter. We’re also seeing a slight improvement in Operating Systems Software (+2), Security (+2) and PCs (+1). Corporate PC Demand Going forward, the findings show the first uptick in corporate PC purchasing plans of the past year. Two-in-three (66%) say their company will buy laptops in 1st Quarter 2012 – up 1-pt from the previous quarter. Planned desktop purchasing (63%) is up 2-pts.

This information is from ChangeWave Research, a division of The 451 Group, and contains confidential business information. It may not be copied or distributed without permission. ©2011 ChangeWave Research. All rights reserved. ChangeWave Research: Corporate IT Spending

While the uptick is encouraging, business PC demand remains at its second lowest level of the past four years. Planned Purchasing. Dell (26%) – which sells 80% of its PCs on the corporate market – is down 1-pt in terms of planned laptop buying. Apple (14%) is unchanged, but remains at its all-time high in the corporate market.

Having reversed its decision to spin off their PC division, Hewlett-Packard (15%) has several new laptop models on the market. H-P’s Folio 13 is their first business ultrabook, a new category of Intel-based laptops featuring slim designs that combine the power and capabilities of laptops with tablet-like features. Despite this, the findings show H-P unchanged in terms of planned corporate laptop buying. We note that Lenovo (10%) is up 2-pts in planned laptop buying. In terms of planned corporate desktop buying, Dell (28%) is unchanged from its all-time low reached in our previous survey. Apple (8%) is down 1-pt, but that’s off their all-time high reached in our previous survey. H-P (15%) is unchanged.

Corporate Tablet Demand Continues to Surge The enterprise Tablet market remains extraordinarily robust, but to date it’s primarily been a one horse show. Apple (83%) continues to be the overwhelming frontrunner in the business tablet market – with no other competitor having so far posed a serious challenge. Samsung (e.g., Galaxy Tab; 5%), Motorola (e.g., Xoom; 5%) and H-P (5%) are now in a three-way tie for a distant second in terms of corporate tablet share. Other rivals – including RIM (e.g., PlayBook; 4%), Lenovo (e.g., IdeaPad; 4%), Dell (e.g., Streak; 3%), Toshiba (e.g.,Thrive; 3%) and Asus (e.g., Eee Pad; 3%) – are even further behind. iPad Leads in Corporate Tablet Satisfaction. A key reason for the iPad’s dominance in the business market is its high level of customer satisfaction. A total of 70% of iPad business users report they’re Very Satisfied with their device – compared to a 45% Very Satisfied rating for all other corporate tablets combined.

Planned Corporate Tablet Buying. Going forward, nearly one-in-four companies ( 23%) say they will be purchasing Tablets for their employees in the 1st Quarter 2012 – up 4-pts just since August, and nearly five times the demand of 15 months ago.

Note: The August 2010 survey question was “Over the next 90 days does your company plan on purchasing Apple iPad tablets for business purposes?” Even with the list of competitors continuing to grow, the Apple iPad remains the overwhelming choice for planned corporate tablet buyers – with better than three-in-four (77%) saying they’ll purchase iPads next quarter. Who is the manufacturer of the Tablets your company is planning on buying?

2 ChangeWave Research: Corporate IT Spending

While Samsung (10%) is still a distant second to Apple, for the second survey in a row we’re seeing real momentum for the Galaxy Tab manufacturer – up 3-pts from August. RIM’s planned buying collapsed in our previous survey (8% to 3%), but is registering an unexpected 2-pt uptick this quarter (5%). Dell (5%) and Motorola (4%) remain unchanged. H-P, after removing itself from the consumer market last quarter, is aiming itself squarely at the commercial tablet market. But our findings are not yet very encouraging for H-P (5%) – down 5-pts in corporate tablet buying plans since August. The Amazon Kindle Fire is the newest entry in the tablet market, and a recent ChangeWave survey shows consumer demand is nothing less than extraordinary. While Amazon isn't targeting the business market at this time, we note the Kindle Fire is already getting some initial corporate interest. A total of 7% of planned corporate buyers say they'll purchase it next quarter. The Impact on Wireless Providers. We also asked respondents of companies planning to buy tablets which wireless service – if any – their company will be using. Verizon (28%; unchanged) is nearly tied with AT&T (29%; down 2-pts) as the top choice for wireless service among companies buying Tablets next quarter, with Sprint (4%; unchanged) a distant third. Corporate Smart Phone Demand In terms of current mobile OS share, the ChangeWave survey shows both the Apple iPhone OS (46%; up 2-pts) and the Google Android OS (GOOG; 35%; up 4-pts) registering yet another jump in the corporate market.

This is the eighth straight quarterly increase for both the Apple iOS and the Android OS within the enterprise market.

The momentum of Apple iOS and Android OS is occurring at the expense of Research-In- Motion’s (RIMM) Blackberry RIM OS (53%), which has declined 6-pts in current share since August. Note that RIM’s corporate share is more heavily concentrated in larger companies and its unit volume per company has historically been highest in the industry.

We note that Windows Phone 7 (5%) is up 1-pt since the previous survey, but is still below its level of two quarters ago (6%). Planned Corporate Smart Phone Buying. Going forward, the survey shows a very slight dip in corporate demand for Smart Phones, with 39% of respondents reporting their company plans to buy smart phones next quarter. While 2-pts less than previously, it’s the second highest level ever recorded in a ChangeWave survey. Apple vs. Research-In-Motion. At the individual manufacturers’ level, Apple (57%) remains the top choice and biggest winner in terms of planned corporate purchases, up 5-pts to a new high. In contrast, the news continues to remain grim for RIM (41%) which is registering a 4-pt decline just one quarter after having relinquished its market lead. It’s their 14th consecutive downtick in a ChangeWave survey, in terms of percentage of companies planning to purchase their phones.

This information is from ChangeWave Research, a division of The 451 Group, and contains confidential business information. It may not be copied or distributed without permission. ©2011 ChangeWave Research. All rights reserved. 3 ChangeWave Research: Corporate IT Spending

Even though several new Blackberries have been released since our previous survey, these findings signal they’ve made little difference to date. We see continuing problems for RIM. Motorola vs. HTC vs. Samsung. Over the past years we've chronicled the rise in corporate demand for Android phones, and this quarter it's Motorola and Samsung that are reaping most of the benefits. Motorola's 4-pt uptick in planned buying (MMI; 19%) puts them comfortably ahead of HTC (16%) – which is up just 1-pt from previously. Samsung (13%; up 3-pts) has jumped to a new all-time high in a ChangeWave survey.

And the Winner is. Once again, Apple (+5) is the momentum winner in terms of corporate planned smart phone buying for next quarter – further evidence of the continuing major impact of its recent iPhone 4S release. Motorola (+4) and Samsung (+3) are also showing momentum in the enterprise smart phone market. Bottom Line: After two consecutive quarterly declines, ChangeWave’s latest IT spending survey points to an improved corporate spending outlook for 1st Quarter 2012.

PCs are registering a slight uptick in corporate buying for the first time in a year. But the monster story of this survey is the huge surge in corporate demand for tablets. Apple continues to be the overwhelming frontrunner in the enterprise tablet market – with no other competitor yet posing a serious challenge to the Industry leader. Going forward, however, Samsung does show some potential, with its Galaxy Tab garnering 10% of the enterprise market next quarter – a significant accomplishment.

Along with Tablets, Apple remains the momentum leader in the enterprise smart phone market as well, with record projected demand for the iPhone 4S. The Google Android OS is also showing momentum for next quarter, with Motorola and Samsung the big beneficiaries of the jump in Android demand.

The ChangeWave Research Network is a group of 25,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

4 ChangeWave Research: Corporate IT Spending Table of Contents

Summary of Key Findings...... 9

1st Quarter 2012 Visibility...... 9

...... Projected IT Spending: A Comparison ...... 9

...... Projected IT Spending For Next Quarter: Nov ’01 – Nov ‘11 ...... 10

...... Projected IT Spending By Company Size ...... 10

A Closer Look at 1st Half 2012...... 11

...... Looking Ahead – IT Budget for Next Half ...... 11

Green Light Spending...... 11

...... Willingness to Spend on IT Products and Services ...... 11

4th Quarter IT Spending...... 12

...... IT Spending Thus Far in Current Quarter (4Q 2011) ...... 12

IT Spending Categories...... 13

Corporate PC, Tablet and Smart Phone Markets ...... 15

Corporate PCs ...... 15

Corporate Tablets ...... 19

Corporate Smart Phones ...... 23

ChangeWave Research Methodology ...... 27

About ChangeWave Research ...... 27

About The 451 Group ...... 27

This information is from ChangeWave Research, a division of The 451 Group, and contains confidential business information. It may not be copied or distributed without permission. ©2011 ChangeWave Research. All rights reserved. 5 ChangeWave Research: Corporate IT Spending I. Summary of Key Findings

Introduction: After two consecutive quarterly declines, ChangeWave’s latest IT spending survey points to an improved corporate spending outlook for 1st Quarter 2012. ChangeWave Research is a division of The 451 Group. A total of 1,623 respondents involved with IT spending in their organization participated in the November 8-21 survey, which also focused on business demand for PCs, tablets and smart phones. 90 Day Outlook: Going forward, 16% of respondents report their company’s IT spending will increase for 1st Quarter 2012 – up 1-pt from our previous survey in August. And while 26% say their IT spending will decrease (or there will be no spending at all), that’s a 5-pt improvement from previously.

Putting these Findings in Context. As the following chart shows, this is the first spending improvement in three quarters. And while IT spending growth remains relatively weak, the net 6-pt uptick is the second biggest improvement in two years.

Projected IT Spending for Next Quarter (1Q 2012) – By Company Size: Importantly, the spending outlook is improving across companies of all sizes – though it remains far weaker among smaller size companies (less than 10 employees).

1st Half 2012: Looking further ahead to the entire 1st half 2012 (Jan-Jun), we also see positive signs. Nearly one-in-five (18%) think their company’s IT budget will be greater than 2nd half 2011 – a 5-pt improvement since the previous survey.

But in a cautionary note, 30% believe their company’s 1st half 2012 IT budget will be less than 2nd half 2011 – which is 3-pts worse than previously.

Willingness to Spend: We asked respondents to rate the willingness of their company to spend money on IT products and services. Nearly three-in-ten (29%) say their company is giving a “Green Light” to IT spending (i.e., spending is normal) – 1-pt improved from the previous quarter.

While another 65% say their company has a “Yellow/Red Light” to spend on IT – this is a 2- pt improvement.

Current Quarter Spending: We also asked respondents if their IT spending was on track thus far in the 4th Quarter, and the results show a slight improvement. While a total of 14% say they’ve spent More than Planned so far in the quarter and 28% say they’ve spent Less than Planned – that’s altogether a net 3-pts better than August.

IT Spending Categories For which of the following main IT Spending categories - if any - have you spent more than planned thus far in the 4th Quarter? (Check All That Apply) Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 PCs 11% 10% 11% 10% 12% Security 8% 8% 9% 8% 7% Storage 8% 7% 8% 7% 9% Servers 7% 7% 8% 8% 8% Software: Enterprise Applications 6% 6% 8% 7% 7% Software: Operating Systems/ Platforms 6% 6% 4% 7% 6% Networking 6% 5% 7% 7% 7% Application Development Software/Tools 5% 4% 5% 5% 5% Virtualization 4% 4% 5% 3% 4% Communications 3% 4% 4% 4% 3% Outsourced IT Services: Systems 3% 4% 3% 3% 4% Integration/Implementation Software-as-a-Service (SaaS)/ 1% 2% 1% 2% 1% Outsourced Application Management Business Process Outsourcing/Hosting 1% 1% 1% 1% 1% (BPO) Don't Know 24% 21% 20% 21% 19% Other 6% 6% 5% 6% 7%

And for which of the following main IT Spending categories – if any – have you spent less than planned thus far in the 4th Quarter? (Check All That Apply) Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 PCs 19% 19% 15% 16% 17% Servers 11% 13% 9% 10% 13% Software: Enterprise Applications 8% 8% 8% 7% 8% Software: Operating Systems/ Platforms 8% 10% 8% 8% 10% Networking 8% 9% 7% 7% 8% Storage 8% 9% 8% 8% 9% Application Development Software/Tools 7% 8% 7% 7% 8% Outsourced IT Services: Systems 6% 7% 5% 5% 6% Integration/Implementation Communications 5% 5% 5% 6% 5% Virtualization 5% 5% 4% 4% 5% Security 4% 6% 5% 6% 7% Software-as-a-Service (SaaS)/ 4% 4% 4% 3% 3% Outsourced Application Management Business Process Outsourcing/Hosting 3% 3% 3% 3% 3% (BPO) Don't Know 25% 21% 23% 24% 23%

Other 4% 3% 3% 4% 3% Change in Net Difference Score: Current Survey (Nov ’11) vs. Previous Survey (Aug’11) Current Previous Survey Survey Change Net Net in Net Overall IT Spending Categories Difference Difference Difference Score Score Score (Nov ’11) (Aug ’11) Storage 0 -2 +2 Application Development Software/Tools -2 -4 +2 Networking -2 -4 +2 Security +4 +2 +2 Software: Operating Systems/ Platforms -2 -4 +2 Servers -4 -6 +2 PCs -8 -9 +1 Virtualization -1 -1 0 Software: Enterprise Applications -2 -2 0 Business Process Outsourcing/Hosting (BPO) -2 -2 0 Outsourced IT Services: Systems -3 -3 0 Integration/Implementation Communications -2 -1 -1 Software-as-a-Service (SaaS)/ Outsourced Application -3 -2 -1 Management IT Categories: Of the 13 IT spending categories focused on in this survey, Networking (Change in Net Difference Score = +2), Application Development Software/Tools (+2), and Storage (+2) have registered the biggest increases since last quarter.

We’re also seeing a slight improvement in Operating Systems Software (+2), Security (+2) and PCs (+1).

10 ChangeWave Research: Corporate IT Spending II. Corporate PCs, Tablets and Smart Phones

(A) Corporate PC Demand

Going forward, the findings show the first uptick in corporate PC purchasing plans of the past year. Two-in-three (66%) say their company will buy laptops in 1st Quarter 2012 – up 1-pt from the previous quarter. Planned desktop purchasing (63%) is up 2-pts.

While the uptick is encouraging, business PC demand remains at its second lowest level of the past four years.

Planned Purchasing. Dell (26%) – which sells 80% of its PCs on the corporate market – is down 1-pt in terms of planned laptop buying. Apple (14%) is unchanged, but remains at its all-time high in the corporate market.

Having reversed its decision to spin off their PC division, Hewlett-Packard (15%) has several new laptop models on the market. H-P’s Folio 13 is their first business ultrabook, a new category of Intel-based laptops featuring slim designs that combine the power and capabilities of laptops with tablet-like features. Despite this, the findings show H-P unchanged in terms of planned corporate laptop buying.

We note that Lenovo (10%) is up 2-pts in planned laptop buying. Netbooks. We also asked enterprise respondents planning to buy laptops next quarter to tell us their company’s Netbook purchasing plans. The consensus estimate for Netbooks is 9% of planned laptop purchases for next quarter – up 1-pt from previously.

(FOR THOSE COMPANIES BUYING LAPTOPS IN 1st QUARTER 2012) What percentage of the laptops your company is buying in the 1st Quarter will be Netbooks? (NOTE: "Netbooks" are low-cost, highly portable laptops designed for basic computing - such as web browsing, email, word processing and other general purpose applications.)

Planned Desktop Purchasing. In terms of planned corporate desktop buying, Dell (28%) is unchanged from its all-time low reached in our previous survey. Apple (8%) is down 1-pt, but that’s off their all-time high reached in our previous survey. H-P (15%) is unchanged.

Note that about 70% of H-P’s sales come from outside the U.S., while our ChangeWave surveys focus primarily on the U.S. market.

(FOR THOSE COMPANIES BUYING COMPUTERS IN 1ST QUARTER 2012) Who is the manufacturer and what computer type(s) is your company planning on buying? (Check All That Apply)

Desktops Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 Dell – Desktop 28% 28% 29% 30% 30% Hewlett-Packard (including 15% 15% 17% 17% 17% Compaq) - Desktops Apple - Desktops 8% 9% 7% 7% 7% Lenovo (formerly IBM) - 5% 5% 5% 5% 4% Desktops Acer (including Gateway and 2% 2% 2% 2% 2% eMachines) - Desktops Sony - Desktops 1% 0% 1% 0% 1% ASUS - Desktops 1% 1% 1% 1% 1% Other - Desktops 2% 2% 2% 2% 2% Don't Know 6% 6% 6% 6% 7% Not Buying Desktops in 1st 37% 39% 34% 34% 33% Quarter

Laptops Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 Dell – Laptops 26% 27% 28% 27% 29% Hewlett-Packard (including 15% 15% 15% 16% 17% Compaq) – Laptops Apple – Laptops 14% 14% 12% 13% 12% Lenovo (formerly IBM) – Laptops 10% 8% 10% 10% 9% Toshiba - Laptops 3% 3% 4% 4% 3% Sony – Laptops 2% 1% 2% 2% 1% Acer (including Gateway and 2% 2% 2% 2% 2% eMachines) – Laptops ASUS - Laptops 2% 1% 1% 2% 1% Other – Laptops 1% 1% 1% 1% 1% Don't Know 6% 6% 7% 7% 7% Not Buying Laptops in 1st 34% 35% 31% 31% 31% Quarter

And for those companies buying computers in 1st Quarter 2012, what operating system(s) will be installed on your new computers?

Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 Linux 4% 5% 5% 5% 6% Mac OS X Lion 8% 9% NA NA NA Mac OS X Snow Leopard 5% 4% 11% 11% 10% Windows 7 Ultimate 5% 5% 5% 5% 5% Windows 7 Professional 42% 40% 40% 41% 40% Windows 7 Home Premium 3% 3% 3% 3% 3% Other Windows OS 10% 12% 16% 15% 16% Other OS 0% 0% 0% 1% 1% Don't Know 5% 5% 5% 5% 6% Not Buying Computers in 1st 21% 21% 19% 19% 18% Quarter

Computer Operating Systems. We asked corporate respondents which operating systems they’ll be installing on their new PCs next quarter, and 50% said Windows 7– up 2-pts from previously. The percentage who said they’re installing Mac OS X (13%) is unchanged.

This information is from ChangeWave Research, a division of The 451 Group, and contains confidential business information. It may not be copied or distributed without permission. ©2011 ChangeWave Research. All rights reserved. 13 ChangeWave Research: Corporate IT Spending (B) Corporate Tablet Demand Continues to Surge

The enterprise Tablet market remains extraordinarily robust, but to date it’s primarily been a one horse show. Current Share. Apple (83%) continues to be the overwhelming frontrunner in the business tablet market – with no other competitor having so far posed a serious challenge Who is the manufacturer(s) of the Tablets your company currently provides? (Check All That Apply)

Samsung (e.g., Galaxy Tab; 5%), Motorola (e.g., Xoom; 5%) and H-P (5%) are in a three- way tie for a distant second in terms of corporate tablet share. Numerous rivals – including RIM (e.g., PlayBook; 4%), Lenovo (e.g., IdeaPad; 4%), Dell (e.g., Streak; 3%), Toshiba (e.g.,Thrive; 3%) and Asus (e.g., Eee Pad; 3%) – are clustered just behind.

Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 Apple (e.g., iPad, iPad 2) 83% 85% 83% 82% 82% H-P (e.g., TouchPad, Slate, DreamScreen) 5% 8% 4% 9% 11% Motorola (e.g., Xoom) 5% 3% 6% NA NA Samsung (e.g., Galaxy Tab) 5% 4% 4% 2% 0% Lenovo (e.g., IdeaPad Tablet, ThinkPad Tablet) 4% NA NA NA NA RIM/Blackberry (e.g., PlayBook) 4% 2% 5% NA NA Acer (e.g., Iconia) 3% 2% 2% NA NA Asus (e.g., Eee Pad, Eee Slate) 3% 1% 1% NA NA Dell (e.g., Streak) 3% 4% 4% 5% 7% Toshiba (e.g.,Thrive) 3% NA NA NA NA Archos (e.g., 101, 70) 1% 1% 1% 0% 0% Barnes & Noble (e.g., Nook Color) 1% 1% NA NA NA HTC (e.g., Flyer) 1% 1% NA NA NA LG (e.g., G-Slate) 1% 0% 1% NA NA Motion (e.g., C5v, F5v) 1% 1% 1% NA NA Sony (e.g., Dash) 1% 0% 0% 1% 2% ViewSonic (e.g., gTablet, ViewPad) 0% 1% 1% 1% NA Don't Know 2% 1% 1% 1% 1% Other 2% 3% 1% 5% 4%

iPad Leads in Corporate Tablet Satisfaction

A key reason for the iPad’s dominance in the business market is its high level of customer satisfaction. A total of 70% of iPad business users report they’re Very Satisfied with their device – compared to a 45% Very Satisfied rating for all other corporate tablets combined.

How satisfied is your company with the Tablets produced by the following manufacturers? (Please rate only those your company currently provides or has previously provided.)

Planned Corporate Tablet Buying. Going forward, nearly one-in-four companies ( 23%) say they will be purchasing Tablets for their employees in the 1st Quarter 2012 – up 4-pts just since August, and nearly five times the demand of 15 months ago.

The previous August 2010 survey question was “Over the next 90 days does your company plan on purchasing Apple iPad tablets for business purposes?” Even with the list of competitors continuing to grow, the Apple iPad remains the overwhelming choice for planned corporate tablet buyers – with better than three-in-four (77%) saying they’ll purchase iPads next quarter.

Who is the manufacturer of the Tablets your company is planning on buying? (Check All That Apply)

While Samsung (10%) is still a distant second to Apple, for the second survey in a row we’re seeing real momentum for the Galaxy Tab manufacturer – up 3-pts from August. RIM’s planned buying collapsed in our previous survey (8% to 3%), but is registering an unexpected 2-pt uptick this quarter (5%). Dell (5%) and Motorola (4%) remain unchanged. H-P, after removing itself from the consumer market last quarter, is aiming itself squarely at the commercial tablet market. But our findings are not yet very encouraging for H-P (5%) – down 5-pts in corporate tablet buying plans since August. The Amazon Kindle Fire is the newest entry in the tablet market, and a recent ChangeWave survey shows consumer demand is nothing less than extraordinary. While Amazon isn't targeting the business market at this time, we note the Kindle Fire is already getting some initial corporate interest. A total of 7% of planned corporate buyers say they'll purchase it next quarter.

(FOR THOSE COMPANIES BUYING TABLETS IN 1st QUARTER 2012) Who is the manufacturer of the Tablets your company is planning on buying? (Check All That Apply) Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 Apple (e.g., iPad, iPad 2) 77% 80% 80% 79% 78% Samsung (e.g., Galaxy Tab) 10% 7% 6% 7% 4% Amazon (e.g.,Kindle Fire) 7% NA NA NA NA Dell (e.g., Streak) 5% 5% 6% 5% 9% H-P (e.g., TouchPad, Slate, DreamScreen) 5% 10% 4% 7% 8% RIM/Blackberry (e.g., PlayBook) 5% 3% 8% 7% 9% Asus (e.g., Eee Pad, Eee Slate) 4% 2% 2% 1% 1% Motorola (e.g., Xoom) 4% 4% 10% 3% NA Acer (e.g., Iconia) 3% 3% 1% 1% 1% Lenovo (e.g., IdeaPad Tablet, ThinkPad Tablet) 3% NA NA NA NA Barnes & Noble (e.g., Nook Tablet, Nook Color) 2% 1% NA NA NA Sony (e.g., Dash) 2% 0% 0% 1% 1% Toshiba (e.g., Thrive) 2% 1% 2% 3% 2% Archos (e.g., 101, 70) 1% 1% 0% 0% 0% HTC (e.g., Flyer) 1% 1% 2% NA NA LG (e.g., G-Slate) 1% 1% 1% 2% NA Motion (e.g., C5v, F5v) 1% 1% 1% NA NA ViewSonic (e.g., gTablet, ViewPad) 1% 1% 0% 0% NA Don't Know 1% 2% 0% 1% 0% Other 3% 3% 3% 4% 5%

The Impact on Wireless Providers We also asked respondents of companies planning to buy tablets which wireless service – if any – their company will be using.

Note: 25% of respondents to the August 2011 survey answered ‘Don’t Know/Other’

Verizon (28%; unchanged) is nearly tied with AT&T (29%; down 2-pts) as the top choice for wireless service among companies buying Tablets next quarter, with Sprint (4%; unchanged) a distant third.

(C) Corporate Smart Phone Demand

Mobile Operating Systems

Current Share. In terms of current mobile OS share, the ChangeWave survey shows both the Apple iPhone OS (46%; up 2-pts) and the Google Android OS (GOOG; 35%; up 4-pts) registering yet another jump in the corporate market.

This is the eighth straight quarterly increase for both the Apple iOS and the Android OS within the enterprise market.

The momentum of Apple iOS and Android OS is occurring at the expense of Research-In- Motion’s (RIMM) Blackberry RIM OS (53%), which has declined 6-pts in current share since August. Note that RIM’s corporate share is more heavily concentrated in larger companies and its unit volume per company has historically been highest in the industry.

Which of the following mobile Operating Systems are used on the Smart Phones your company currently provides? (Check All That Apply) Curren Previou Previou Previou Previou Previous Previous t s s s s Survey Survey Survey Survey Survey Survey Survey Aug ‘10 May ‘10 Nov ‘11 Aug ‘11 May ‘11 Feb ‘11 Nov ‘10 Blackberry OS (RIM) 53% 59% 61% 64% 64% 66% 69% iOS (Apple) 46% 44% 38% 35% 33% 31% 30% Android (Google) 35% 31% 27% 25% 20% 16% 10% Windows Phone 7 * 5% 4% 6% 6% 7% 9% 10% Mobile Linux 1% 0% 0% 1% 1% 0% 1% Symbian 1% 1% 2% 2% 2% 2% 2% webOS (H-P/Palm) ** 1% 2% 3% 4% 5% 6% 7% Don't Know 2% 1% 3% 3% 4% 4% 3% Other 1% 1% 0% 0% 0% 0% 0% *In the previous May ’11 and Feb ’11 surveys there were two response choices: ‘Windows Phone 7’ and ‘Windows Mobile (6.5 or earlier); and in the previous Nov ’10 and earlier surveys the response choice was ‘Windows Mobile’. **In the previous May ’11 and earlier surveys there were two response choices ‘Web OS (Palm Pre/Pixi)’ and ’Palm OS (Treo/Centro)’ We note that Windows Phone 7 (5%) is up 1-pt since the previous survey, but is still below its level of two quarters ago (6%). Planned Corporate Smart Phone Buying. Going forward, the survey shows a very slight dip in corporate demand for Smart Phones, with 39% of respondents reporting their company plans to buy smart phones next quarter. While 2-pts less than previously, it’s the second highest level ever recorded in a ChangeWave survey.

Apple vs. Research-In-Motion. At the individual manufacturers’ level, Apple (57%) remains the top choice and biggest winner in terms of planned corporate purchases, up 5- pts to a new high.

In contrast, the news continues to remain grim for RIM (41%) which is registering a 4-pt decline just one quarter after having relinquished its market lead. It’s their 14th consecutive downtick in a ChangeWave survey, in terms of percentage of companies planning to purchase their phones.

Even though several new Blackberries have been released since our previous survey, these findings signal they’ve made little difference to date. We see continuing problems for RIM. Motorola vs. HTC vs. Samsung. Over the past years we've chronicled the rise in corporate demand for Android phones, and this quarter it's Motorola and Samsung that are reaping most of the benefits. Motorola's 4-pt uptick in planned buying (MMI; 19%) puts them comfortably ahead of HTC (16%) – which is up just 1-pt from previously. Samsung (13%; up 3-pts) has jumped to a new all-time high in a ChangeWave survey.

And the Winner is. Once again, Apple (+5) is the momentum winner in terms of corporate planned smart phone buying for next quarter – further evidence of the continuing major impact of its recent iPhone 4S release. Motorola (+4) and Samsung (+3) are also showing momentum in the enterprise smart phone market.

(FOR THOSE COMPANIES BUYING SMART PHONES IN 1st QUARTER 2012) Who is the manufacturer of the Smart Phones your company is planning on buying? (Check All That Apply) Current Previous Previous Previous Previous Survey Survey Survey Survey Survey Nov ‘11 Aug ‘11 Feb ‘11 Nov ‘10 Aug ‘10 Apple (e.g., iPhone) 57% 52% 45% 40% 34% Research In Motion (e.g., 41% 46% 56% 58% 62% BlackBerry) Motorola (e.g., Droid Bionic 4G, 19% 15% 16% 16% 15% Photon 4G, Atrix 4G) HTC (e.g. Thunderbolt 4G, Inspire 16% 15% 12% 17% 16% 4G, EVO 3D) Samsung (e.g., Infuse 4G, Nexus S 13% 10% 6% 6% 4% 4G, Droid Charge 4G) LG (e.g., Revolution 4G, Thrill 4G, 4% 4% 2% 2% 1% Optimus) Nokia (e.g., N8, Astound, C3) 3% 2% 3% 4% 4% Dell (e.g., Venue, Venue Pro) 2% 1% 1% NA NA T-Mobile (e.g., Sidekick 4G, G2x 1% 1% 1% 1% 2% with Google) H-P/Palm (e.g., Pixi, Veer 4G, Pre 2) 0% 2% 2% 1% 2%

Other 1% 1% 0% 1% 1%

20 ChangeWave Research: Corporate IT Spending ChangeWave Research Methodology

The current findings are based on a survey of ChangeWave Research Network members involved with IT spending in their organization, conducted November 8-21, 2011. The goal of the survey was to get an up-to-date picture of IT spending for the 1st Quarter of 2012. To this end, the survey was composed of a sample of 1,623 accredited members.

ChangeWave's proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members.

The Research Network is assembled from senior technology and business executives in leading companies of select industries. Nearly half of members (48%) have advanced degrees (e.g., Master's or Ph.D.) and 86% have at least a four-year bachelor's degree.

The business and investment intelligence provided by ChangeWave provides a real-time view of companies, technologies and business trends in key market sectors, along with an in- depth perspective of the macro economy – well in advance of other available sources.

About ChangeWave Research ChangeWave Research, an independent division of The 451 Group, is a survey research firm that identifies and quantifies change in corporate buying & business trends, telecom trends, and consumer spending & electronics trends. The ChangeWave Research Network is a group of 25,000 highly qualified business, technology, and medical professionals – as well as early adopter consumers – who work in leading companies of select industries. ChangeWave surveys its Network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports.

ChangeWave delivers its products and services on the Web at www.ChangeWaveResearch.com. ChangeWave Research does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report. About The 451 Group The 451 Group is a leading technology-industry analyst company focused on the business of enterprise IT innovation. The company's analysts provide critical and timely insight into the market and competitive dynamics of innovation in emerging technology segments. The 451 Group is headquartered in New York, with offices in key locations, including San Francisco, Washington, DC, London, Boston, Seattle and Denver. For additional information on The 451 Group, go to: www.the451group.com. For More Information: ChangeWave Research Telephone: 301-250-2363 7101 Wisconsin Ave. Fax: 240-200-3988 Suite 1350 www.ChangeWaveResearch.com Bethesda, MD 20814 [email protected]

This information is from ChangeWave Research, a division of The 451 Group, and contains confidential business information. It may not be copied or distributed without permission. ©2011 ChangeWave Research. All rights reserved. 21