Compaq Regains No. 1 Position in TBR's Server Satisfaction Tracking.

Business/Technology Editors

HAMPTON, N.H.--(BUSINESS WIRE)--May 21, 2001

Technology Business Research (www.tbri.com) has just published its 1Q01 Corporate IT Buying Behavior and Customer Satisfaction Study: Intel Servers, Desktops and Notebooks, part of a quarterly tracking service measuring corporate end-user satisfaction with desktop, Intel-based server and laptop/notebook systems vendors. This quarter's study is based on the opinions of more than 500 IT managers at large U.S. corporations from interviews conducted between January and April 2001. TBR cites two significant events in this quarter's study: Compaq has regained the No. 1 position in server satisfaction following a period of 12 quarters where the vendor ranked behind Dell, and IBM has now virtually tied with Dell for the No. 1 position in notebook satisfaction after 11 consecutive quarters of Dell domination.

         Overview of TBR's 1Q01 Customer Satisfaction Results

                     Sample     1Q01    Rank  Change 4Q00  Change 1Q01
                      Size      Score          over 3Q00     over 4Q00

Intel Servers
Compaq                148       85.79      1      +0.3%      +1.0%
Dell                  101       83.71      2      -1.4%      -1.2%
Hewlett-Packard       61        81.15      3      -2.9%      -1.4%
IBM                   78        80.31      3      -2.1%      -1.4%
Desktops
Dell                  121       84.60      1      -3.1%      +0.3%
Compaq                116       82.81      2      -4.2%      +4.4%
Hewlett-Packard       66        82.08      2      -5.9%      +3.4%
IBM                   85        80.09      3      +0.6%      -1.6%
Gateway               57        79.28      3      -1.5%      -3.2%
Notebook
Dell                  124       81.05      1      -6.1%      +1.0%
IBM                   115       80.40      1      -4.3%      +5.0%
Compaq                81        78.05      2      -1.8%      +1.5%
Toshiba               68        76.72      2      -2.9%      -0.2%
    The weighted customer satisfaction scores TBR uses as a means of
    ranking the systems vendors are based on a calculation where each
    satisfaction score for each attribute is weighted by the stated
    importance of each attribute. These are tallied based on a scale
    of 100 points. Overall satisfaction and customer loyalty ratings
    are given the highest relative weights. Weights are adjusted each
    quarter to account for shifts in buying patterns.

Compaq's return to No. 1 for server satisfaction has been building during the past several quarters, a period where the vendor's scores have been consistent, while Dell's satisfaction ratings have fluctuated. The result has been a gradual rise in Compaq's weighted score while Dell's score has been moving in a downward trend line. In the mobile arena, IBM's ratings have risen sharply in 1Q01 while Dell's have remained relatively constant. The stabilizing of Dell's scores following the previous quarter's significant drop, however, has resulted in a veritable tie between Dell and IBM in the current quarter. It is not known at this time whether this is a temporary shift or the beginning of a true change. Below are some highlights of the quarter for each vendor TBR covers.

Compaq (NYSE: CPQ) For the second consecutive quarter, Compaq is the only server vendor for which the overall weighted satisfaction ratings have shown an increase while all competitors have been on the decline. In addition to the consistency of response among Compaq's customers, the vendor is also distinguished from the competition by its ability to meet market expectations at a very high level evenly across all attributes. Compaq's competitive strengths this quarter are identified as ease of configuration, scalability, server manageability and enterprise solutions.

Due to declining satisfaction in the areas of server support, scalability and server management for several consecutive quarters, Dell (NASDAQ: DELL) has been unable to maintain its lead over Compaq. Dell customers continue to cite the value advantage of Dell servers over competitive brands, and TBR continues to cite this as a clear strength for the vendor not shared by the competition. Dell's satisfaction ratings across all three form factors point to a particular area of concern regarding the telephone/helpdesk support mechanism. TBR believes these issues are the consequence of Dell's rapidly growing customer base, which is making it difficult for the vendor to fully respond to the needs of varying types of new customers.

Gateway's (NYSE: GTW) desktop satisfaction ratings have been declining at significant levels during the past three quarters. During this time period, customer satisfaction has been falling most decidedly in the areas of ease of set-up, overall hardware performance and cost of ownership. Gateway customers this quarter were more likely than other vendors' customers to specifically state that hardware reliability is a major drawback, this being a major brand differentiator. Gateway customers also frequently mention support and customer service as areas where the vendor is not meeting their expectations.

Hewlett-Packard (NYSE: HWP) server satisfaction shows a slight increase in on-site support appreciation, yet overall, HP's scores are moderately down again, following a sharper decline in the fourth quarter. Both Compaq and Dell brought in performances much higher than that of HP this quarter, while HP has failed to meet the expectations of the demanding marketplace in some critical areas of server satisfaction: out-of-box quality and overall hardware reliability. On the corporate desktop, HP is ranked No. 2 with Compaq due to a rebound in satisfaction relative to support.

IBM's (NYSE: IBM) weighted satisfaction rating for notebooks has risen by an enormous margin of five percentage points from the preceding quarter, the result of a significant improvement across all areas of support. Some areas that have historically shown extreme vulnerability for IBM have also improved, including parts availability and delivery time. These major changes in opinion among IBM's customers have been sufficient to challenge IBM's principal competitor Dell for the first time since 2Q98. Across all form factors, however, TBR has uncovered a common area of concern for IBM customers: ease of set-up/configuration.

Toshiba's satisfaction ratings regarding technical support response and global support availability have declined from the preceding quarter and, consequently, TBR has reinstated these attributes as competitive weaknesses for the vendor. Toshiba's customers most often mentioned support and product availability as the vendor's major shortcomings.

The complete study results are contained in TBR's 1Q01 Corporate IT Buying Behavior and Customer Satisfaction Study: Intel-Servers, Desktops and Notebooks. The study represents an installed base of more than 2 million systems and a purchase intent of around 500,000 systems. For vendors, distributors, large end users and the investment community, this program has become the preeminent tactical tool for monitoring customer satisfaction from quarter to quarter. A customer satisfaction research program subscription consisting of four quarterly reports is available for $5,000 annually to interested parties through the contacts listed below. TBR publishes separate quarterly customer satisfaction studies on service and support and on RISC-based servers.

Complete results available to accredited journalists.