Lenovo earns top x86 server customer satisfaction scores in 2Q15. August 2015 TBR T EC H N O LO G Y B U S I N ES S R ES EAR C H, I N C.

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1 Lenovo earns top x86 server customer satisfaction scores in 2Q15 August 2015 TBR T EC H N O LO G Y B U S I N ES S R ES EAR C H, I N C.

2 Lenovo x86 server customer satisfaction scores exceed those of Dell and HP Global server customers are deploying x86-based solutions in increasingly demanding use cases, including mission-critical workloads such as ERP, CRM, business intelligence and analytics. Consequently, customers are demanding x86 servers with strong performance and reliability, as globalization requires continuous server uptime. TBR s 2Q15 Corporate IT Buying Behavior and Customer Satisfaction Study: x86-based Servers (CSAT x86-based Servers Study) found that customers require a server vendor to excel in several areas, including sales processes, product quality, and services and support. Customer satisfaction scores show customers view Lenovo as a vendor they can rely on to provide high-quality x86 servers backed with helpful and responsive sales, services and support. Because qualified survey respondents made an x86 server purchase in the past 12 months, the IBM/System x sample represents customers who purchased from either IBM or Lenovo or both. Lenovo completed its acquisition of IBM s x86 server business on Oct. 1, In TBR s 2Q15 CSAT x86-based Servers Study, Lenovo customers reported higher levels of satisfaction with their x86 servers compared to Dell and HP customers. For the 2Q15 study, TBR measured 22 customer satisfaction attributes; Lenovo was the outright leader or tied for the lead in rolling six-month mean satisfaction scores. Lenovo s overall weighted satisfaction score, which includes sales, product, service and loyalty attributes, was 75.5 out of a possible 100, surpassing Dell and HP, which scored 73.1 and 73.3, respectively. TBR believes Lenovo s leading satisfaction score indicates the company is meeting customer expectations in the x86 server market through high-quality hardware and consistently strong sales and services quality. Vendors must excel in critical attributes to meet customer expectations Lenovo, Dell and HP all historically perform well in product-related attributes as these are table stakes for the industry in which organizations demand a high-level of performance, reliability and quality. As vendors are increasingly challenged to differentiate in product-related attributes, server OEMs are turning to sales and support attributes such as ongoing support and maintenance, delivery time, on-site support and phone support to differentiate. Further, customers continue to place a high level of importance on attributes related to ensuring high uptime, with ongoing hardware reliability and replacement parts availability increasing in importance compared to 1Q15. Consequently, vendors that enable their customers to achieve high uptime levels by providing reliable products and quick turnaround on parts for maintenance were more likely to score higher satisfaction according to TBR s 2Q15 CSAT x86-based Servers Study. TBR surveys x86 server customers quarterly to determine the sales, product, and services and support attributes that are most important to customer satisfaction. In the 2Q15 study customers rated hardware quality, reliability, performance, virtualization, efficiency, scalability, purchase price and total cost of ownership (TCO) as the most critical attributes to overall satisfaction with their x86 servers. Services, support, maintenance and management capabilities are secondary to the product features critical to customers, but are still important for vendors to differentiate from competing server vendors. Initial hardware quality and ongoing reliability Enterprises deploy x86 servers for an increasingly diverse range of workloads, including performance-intensive and business-critical applications. As a result, customers surveyed in TBR s 2Q15 CSAT x86-based Servers Study reported initial hardware quality and ongoing hardware reliability were critical to their overall server satisfaction. Vendors that provide higher-quality hardware than competitors generate higher overall satisfaction scores and drive x86 server sales more successfully. Performance Although all x86 servers are built on a similar processor design, server vendors tailor their x86 solutions to help customers consolidate their infrastructure, as well as optimize performance for high-growth areas such as cloud and analytics. Workload-specific solutions provide performance advantages depending on the customers IT 2 System x Server White Paper August Technology Business Research Inc.

3 requirements. For example, server vendors optimize x86 server models for compute- or memory-intensive workloads such as analytics, which provides efficiency and performance advantages for customers. Virtualization, efficiency, scalability Enterprises use server virtualization to reduce IT operating expenses and improve server efficiency. With the growing influence of server virtualization on customers data centers, organizations increasingly seek server hardware that can be easily and efficiently scaled. Further, customers demand x86 servers with automation features to simplify management, drive efficiency and support their in-house IT departments. TBR anticipates customers will increasingly require efficient and scalable x86 server hardware as the use of virtualization grows from customers seeking to reduce IT costs and improve efficiency. Service and support Enterprise IT departments seek support services from x86 server vendors to augment their in-house support organizations. High-quality services and support are becoming increasingly important for x86 server vendors to differentiate from competitors, as product-related attributes increasingly become table stakes for the industry. In TBR s 2Q15 CSAT x86-based Servers Study, seven out of nine service attributes ranked as either critical or important to customer satisfaction, indicating customers demand highly available services and support backed by strong technical expertise. Purchase price and total cost of ownership (TCO) In TBR s 2Q15 CSAT x86-based Servers Study, customers cited purchase price and TCO as two critical factors in the overall satisfaction in their x86 server purchase. A shift in the value proposition in the global server market away from hardware and toward software and services is causing customers to demand lower x86 server prices. While purchase price remains a key factor in the decision to purchase an x86 server, potential customers are increasingly analyzing TCO to gain a more accurate view of long-term business impact. TBR s 2Q15 CSAT x86-based Servers Study found that regardless of vendor, dissatisfaction with TCO is one of the top three reasons customers are not planning to buy again from their vendor, which illustrates the growing importance of TCO in the x86 server market. System x excels in customer satisfaction for critical sales, product and support attributes Lenovo s continual investments in enhancing its x86 server portfolio and its commitment to providing high-quality services and support enables the company to achieve leading x86 server satisfaction scores. The vendor s x86 solutions help customers to achieve desired business objectives such as reduced IT costs and new insights into strategic decisions, helping Lenovo capture the No. 1 overall satisfaction rating in TBR s 2Q15 CSAT x86-based Servers Study. The company cultivates a strong value proposition with its server portfolio, as its solutions are competitively priced and consistently meet customers expectations for quality, reliability, performance, scalability and support services. Initial hardware quality and ongoing reliability Lenovo s System x team develops its x86 solutions to meet customer expectations for initial hardware quality and ongoing reliability. In TBR s study, customers reported high satisfaction with System x initial hardware quality, resulting in System x earning the No. 1 position in rolling six-month satisfaction over Dell and HP in 2Q15. Lenovo x86 servers score well in ongoing hardware reliability, an attribute that is critically important to x86 server customers. System x was the leader for rolling sixmonth ongoing hardware reliability satisfaction in TBR s 2Q15 CSAT x86-based Servers Study. Hardware reliability will remain a critical factor in x86 server satisfaction and will continue to play a large role in purchase decisions as missioncritical workloads are increasingly deployed on x86 servers. [The servers] run very well, are reliable and work well in our environments. Lenovo (System x) rack customer 3 System x Server White Paper August Technology Business Research Inc.

4 Performance Lenovo x86 servers achieved the highest rolling six-month mean customer satisfaction scores for performance in 2Q15. Lenovo s server performance satisfaction scores increased from the previous two quarters, resulting in its No. 1 position in rolling three-month performance satisfaction. Notably, the System x server performance score of 5.79 was significantly higher than Dell s and HP s x86 server performance scores of 5.18 and 5.4, respectively, among businesses with medium IT departments (51 to 300 employees). TBR believes this demonstrates Lenovo s success in leveraging System x to target midsized businesses. Virtualization, efficiency, scalability In 2Q15 Lenovo earned the No. 1 position in rolling six-month virtualization, efficiency and scalability satisfaction. Lenovo s x86 server customers need to add server capacity as their businesses grow and new regulations pressure their data centers. Customers use server virtualization to cost-effectively add workloads without having to add new servers, helping to drive operational efficiency improvement and cost savings. Lenovo s System x servers are scalable, and users can easily increase capacity as needed. Additionally, Lenovo s System x portfolio offers customers the ability to consolidate multiple operating systems, software stacks, open platforms and hypervisors from leading software providers such as VMware, Microsoft, Red Hat and SUSE, helping the company compete with its main rivals, Dell and HP, which offer similar capabilities for customers. Service and support Customers surveyed in TBR s 2Q15 CSAT x86-based Servers Study were asked to provide feedback on nine attributes related to the services and support of their x86 servers. In 2Q15 Lenovo was the outright leader in all nine services and support attributes, spanning phone, on-site, online, social media and automated support, as well as ongoing maintenance and replacement parts availability. Lenovo leverages its services and support staff to enable customers to minimize server downtime, deploy new x86- based solutions, consolidate their infrastructures and troubleshoot issues quickly and cost-effectively. System x customers Purchasing x86 servers from Lenovo enables organizations to focus on supporting their mission-critical workloads, while Lenovo and IBM GS employees provide support services or entirely manage the server infrastructure. Lenovo s affiliated partner resources are also used to deploy hardware solutions and software services. While the divestiture of IBM s x86 business to Lenovo was completed in October 2014, IBM will continue to provide support for System x servers for at least the next five years. According to the vendors plans, services and support will be provided by IBM and managed by Lenovo. TBR believes the vendors will leverage their experience from the similar arrangement they developed following the sale of IBM s PC division to Lenovo in 2005 to effectively provide services and support to global System x customers. Purchase price and total cost of ownership (TCO) Lenovo tied with Dell for the No. 1 ranking in rolling six-month customer satisfaction for both purchase price/acquisition and TCO to customers surveyed in TBR s 2Q15 CSAT x86-based Servers Study. Further, Lenovo was the outright leader in purchase price satisfaction among medium and large (more than 300 employees) IT customers, which TBR believes demonstrates the high-end positioning of System x in the global x86 server market. Lenovo is working to improve TCO satisfaction by better aligning customer expectations with results they can realistically expect, avoiding surprise expenses and less-than-satisfactory experiences. On-site service people are knowledgeable and prompt. Prompt responses; complete answers; high level of experience. Well within our purchase requirements/budget. System x customer 4 System x Server White Paper August Technology Business Research Inc.

5 Conclusion System x servers meet and exceed the demands customers are placing on x86 servers. Based on consistent customer feedback in the CSAT x86-based Servers Study, System x satisfies customer demand for hardware quality and reliability; performance; virtualization, efficiency and scalability; and purchase price and TCO. Lenovo s No. 1 overall ranking for System x in TBR s 2Q15 CSAT x86-based Servers Study demonstrates it is adapting sales process, hardware quality and support for System x to meet the changing needs of its global x86 server customers. About TBR s Quarterly Customer Satisfaction (CSAT) Studies Technology Business Research Inc. (TBR) measures the expectations, satisfaction and loyalty of enterprise customers in its quarterly CSAT studies. TBR surveys more than 1,200 individuals responsible for purchasing x86 servers and PCs at North America-based enterprises with more than 500 employees on a quarterly basis. TBR ranks major vendors in each form factor area through a series of indices including sales satisfaction, product satisfaction, service satisfaction and loyalty. About TBR Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. For more information TBR has been empowering corporate decision makers since For more information, visit Technology Business Research, Inc. 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 Business Research 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 be construed 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 and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce. 5 System x Server White Paper August Technology Business Research Inc.

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