Dell Receives Top Honors While IBM Solidifies #2 Ranking in TBR 4Q Customer Satisfaction Ratings.

HAMPTON, N.H.--(BUSINESS WIRE)--Jan. 25, 1999--

IBM Retains Gains Established in Previous Quarter with

Continued Improvement for Intel Server Satisfaction

Based on the results of Technology Business Research's (www.tbri.com) 4th Quarter Corporate IT Buying Behavior and Customer Satisfaction Study, conducted with 300 F1000 IT Managers, Dell (Nasdaq:DELL) continues as the number one vendor for customer satisfaction across all three form factors. Dell's scores are the most consistent from one quarter to the next, while IBM (NYSE:IBM) has gained respect among its customers in the sample for Intel server satisfaction and Compaq's (NYSE:CPQ) scores have increased for corporate desktop satisfaction. Both vendors have maintained their improvements over the previous quarter for notebook satisfaction.

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                        4Q Score     Rank      % Change     % Change
                                               2Q to 3Q    3Q to 4Q(a)
Notebook:
Dell                     84.79         1          +.8%        -4.5%
IBM                      82.23         2         +7.4%        -4.9%
Compaq                   79.37         3        +10.3%        -4.4%
Toshiba                  77.61         4         +4.9%        -3.9%

Intel Servers:
Dell                     88.97         1         +2.3%        +1.7%
IBM                      88.30         2         +4.9%        +4.2%
Compaq                   85.46         3         +3.9%           0%
Hewlett-Packard          84.17         4         +1.1%        -2.0%

Desktops:
Dell                     86.87         1         +2.7%        +0.8%
Compaq                   82.88         2            0%        +3.7%
IBM                      82.84         2         +7.4%        +0.7%
Hewlett-Packard          82.62         2         +3.3%        -0.9%
Gateway                  80.91         3         +1.6%        +1.1%

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(a) Appearance of falling scores for all notebook vendors in 4Q rankings the result of adjusted weightings due to increased importance of certain attributes, e.g., delivery time, repair time.

Notebooks:

The key factors leading to notebook customer satisfaction are price/performance, overall reliability, repair time, and delivery time. Dell's satisfaction scores are significantly higher than its competitors for all of these attributes save repair time, where IBM has a slight advantage and where Toshiba is particularly weak. IBM customers in the sample are not as price sensitive as other vendors' customers and are primarily driven by reliability, service/support, and product design. IBM's scores for technical support response and repair time continue to impress, representing a stabilization of perception from the previous quarter.

While the improvements in Compaq's scores from the 3rd quarter have remained intact, the vendor continues to underperform for both overall reliability and long-term reliability. Toshiba continues to perform well below par for repair time, technical support response, and price/performance.

The issues of delivery time and volume discounting for notebooks are two areas within which there have been some significant developments this quarter. All vendors show a relative weakness in this ability to delivery new notebooks in a timely manner, and as promised, compared to Dell. For volume discounting, historically an area where Dell has stood alone, Dell is now apparently facing some aggressive competition from IBM.

Intel Servers:

Intel server satisfaction is primarily driven by price/performance, reliability, value added support, disk storage capacity, and technical support response. Dell remains the top scoring vendor, particularly strong for price/performance and total cost of ownership, with upgradability/scalability emerging as a new strength this quarter. Most Intel server customers focus on the upgrade path in terms of ease of upgrade along with the associated costs, which would account for Dell's high scores in this area. The customer satisfaction scores for IBM have improved across all areas save price/performance and cost of ownership, areas which are not of primary concern among IBM's customers. IBM's strengths are primarily in the performance feature areas (upgradability, storage capacity, and server management).

Compaq continues to maintain a fairly loyal customer base, particularly in the areas of reliability and performance, although the support issues continue to be problematic and are the principal reasons customers discontinue buying servers from Compaq. Hewlett-Packard (NYSE:HWP), previously falling short only in the pricing issues, is beginning to fall short of customer expectation as demands for performance increase. HP customers in this quarter's sample are less than satisfied with the limitations, complexities and associated costs of upgrading their servers. HP scores well, however, for Intel server support.

Desktops:

On the corporate desktop, price/performance and delivery time are key, two areas where Dell customers perceive their vendor as distinctly superior. For IBM, while delivery time has improved somewhat over the previous quarter, the vendor continues to fall short of customer expectation. IBM's improvements this quarter are primarily in the areas of value added support and volume discounting, that latter of which represents a potential new challenge for Dell.

Compaq, the most improved desktop vendor, gains credibility this quarter for out of box quality, technical support response, and overall hardware reliability and performance, yet this is not sufficient to insure a serious competitive advantage in the area of customer satisfaction. Hewlett-Packard is falling short of meetings its customers' expectations for support, in stark contrast to the vendor's server division where this attribute is a strength.

These results are contained in TBR's eighth consecutive quarterly Corporate IT Buying Behavior and Customer Satisfaction Study. The fourth quarter study represents an installed base of approximately 2.2 million systems. The report is based on interviews with MIS/IT and purchasing managers at 300 large U.S. corporations. 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 $4,950 annually to interested parties through the contacts listed below.

Complete results available to accredited journalists.