Contents. Hardware Platforms Weekly Issue 44

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1 Hardware Platforms Weekly Issue 44 Introduction to Hardware Platforms Weekly Hardware Platforms Weekly allows Gartner Dataquest analysts to share opinions and analysis of key events as they unfold. To learn more about Gartner's industry-leading products and services, we encourage you to contact us at: or contact your local account executive. You can also visit us at About Gartner Gartner Dataquest is the recognized leader in providing the high-technology and business communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, e-business, and professional services sectors of the global IT industry. Gartner provides unrivaled thought leadership for more than 10,500 organizations, helping clients achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner's technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit; Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and at Contents Client Platforms Focus Area... 2 Spotlight on Client Platforms... 2 Recent Spotlight Articles... 2 Market Highlights... 2 Gartner Raises 4Q03 PC Projections, Warns Against Over-Exuberance... 2 Client Computing... 3 Apple to Open First Retail Store in Tokyo... 3 Enterprise Computing... 4 HPandOracleSetWorldRecordServer Performance Mark... 4 Recently Published Research... 5 Press.gartner.com... 6 Gartner Conferences... 6 Gartner, founded in 1979 and headquartered in Stamford, Connecticut, achieved fiscal 2001 revenue of $963 million. Gartner's 4,000 associates, including 1,200 research analysts and consultants, are in more than 90 locations worldwide Gartner, Inc. and/or its Affiliates. All Rights Reserved. 1

2 2 Hardware Platforms Weekly, Issue 44 Client Platforms Focus Area Computing hardware is the foundation of information technology, and one of the largest single IT markets. It is also the market segment in which IT managers and vendors face the greatest number of decisions and opportunities, and competition is toughest. Backed by intensive statistical research, this Focus Area addresses the buyers, vendors and technologies that comprise the hardware marketplace. The research and analysis provide key strategic and tactical insights to this segment's vendors, users and investors. The Client Platforms Focus Area can be found on Gartner Dataquest's Web page at Spotlight on Client Platforms Spotlight on Client Platforms provides an overview for a suite of Research Briefs specially commissioned to address a specific topic area. The overview and accompanying briefs can be found on the Client Platforms Focus Area. Recent Spotlight Articles "Client Issues for Client Platforms," 1 October "PC TCO Revised for Longer Life and New Technologies," 17 September "3Q03: Hardware and Systems, Semiconductors Forecast Scenarios," 12 September Market Highlights Gartner Raises 4Q03 PC Projections, Warns Against Over-Exuberance Driven by strong PC sales in the third quarter of 2003, Gartner Dataquest analysts are increasing their projections for fourth quarter PC shipments. Worldwide PC shipments will total 47.2 million units in the fourth quarter of 2003, a 12.4 percent increase from the same period last year, according to Gartner forecasts released 7 November Gartner Dataquest analysts are now projecting total worldwide PC shipments to be million units in 2003, a 10.9 percent increase from 2002, up from the 8.3 percent projection in their September version. "Third quarter results were stronger than had been expected, led largely by the home and small business markets," said Charles Smulders, vice president of Gartner's Computing Platforms Worldwide group. "We see the third quarter results as an encouraging sign, and consequently we have increased our forecast for the fourth quarter of 2003 as well as the year-end projections. But we remain cautious in our overall outlook."

3 Hardware Platforms Weekly, Issue 44 3 Analysts highlighted four issues that might spoil future PC growth prospects: Large-corporate sales Demand remains lackluster, with the notable exception of Europe, where the appreciation of the euro against the U.S. dollar has been driving growth through its impact on euro-denominated prices. Home market sales Despite showing strong growth in the third quarter of 2003, the U.S. home market could prove fragile in coming quarters, especially because its recent growth may have been driven by temporary factors, such as recent tax rebates and lower tax withholdings. Inventory levels In the U.S. retail market, inventory levels in October were noticeably higher this year than last year. Japanese consumer market In the strong third quarter of 2003, the Japanese home market appears to have been heavily influenced by early new model introductions in advance of Japan's new PC recycling law, which became effective 1 October "A global economic recovery remains an essential ingredient for a strong PC market recovery. While U.S. recovery prospects appeared to have improved significantly in recent weeks, the outlook for the rest of the world continues to remain uncertain, with many countries intently looking to the United States to pull them out of the doldrums," said George Shiffler, principal analyst for Gartner's Computing Platforms Worldwide group. "Our forecast models continue to show strong potential for growth in the number of buyers upgrading during the next year, but levels of actual activity will be highly dependent on worldwide economic circumstances," Shiffler said. Additional information is available in the Gartner Dataquest Perspective "4Q03 Global PC Forecast Scenarios Update: Stronger Growth Seen." The report examines key drivers and inhibitors to the PC industry for the fourth quarter of 2003, as well as projections for This report is available on Gartner's Web site at www3.gartner.com/displaydocument?id=414383&ref=g_search. Client Computing By Tom McCall (tom.mccall@gartner.com), George Shiffler (george.shiffler@gartner.com), Kiyomi Yamada (kiyomi.yamada@gartner.com) and Charles Smulders (charles.smulders@gartner.com) Apple to Open First Retail Store in Tokyo On 4 November 2003, Apple announced it would open a store in Tokyo's Ginza shopping district on Sunday, 30 November 2003, at 10 a.m. This will be Apple's 73rd retail store and its first one outside the United States. Apple's Store Ginza will feature five floors where customerscanshopforandlearnaboutthelatestappleproductsandsolutions. According to Apple, Store Ginza will host more than 400 customer events each month, including a series of hands-on training classes.

4 4 Hardware Platforms Weekly, Issue 44 Gartner Dataquest Analysis Apple's choice of Japan makes considerable sense, given it is the company's secondlargest PC market, accounting for about 11 percent of Apple's PCs shipments in the second quarter The choice of Ginza, one of Tokyo's high-end shopping districts, is an interesting one. Apple's store will be in the center of Ginza, with many department stores and brand name clothing stores nearby. This choice of location clearly shows that thecompany'spurposeistoreinforcetheapplebrand,aswellaspromotingitsproducts. It also demonstrates that the company is targeting regular-knowledge customers rather than technology enthusiasts, who can be found more in Akihabara, Tokyo's famous Electric District. In fact, many Japanese PC vendors have chosen shopping areas like Ginza other than Akihabara for their new product launches. In addition, many American companies, such as McDonald's and Starbucks, selected Ginza for their first store in Japan. This store's success will be critical for Apple, which has been losing PC market unit share in Japan. Apple's unit share in the Japanese PC market in 2Q03 was about 3 percent. Enterprise Computing By Kiyomi Yamada (kiyomi.yamada@gartner.com) HP and Oracle Set World Record Server Performance Mark On 5 November 2003, HP and Oracle broke through a key technology performance barrier, becoming the first companies ever to top 1 million transactions per minute on the Transaction Processing Council's TPC-C benchmark. The result was achieved running Oracle Database 10g, an HP Integrity Superdome server and Intel Itanium 2 processors. The benchmark not only sets a new industry record, but also being positioned to reflect the power of industry-standard servers running a Unix operating system in "scale up" single server configurations. HP and Oracle achieved 1,008, transactions per minute using the "C" benchmark type (tpmc) with a price/performance ratio of $8.33/tpmC. This result is 30 percent faster than achieved by the nearest competitive hardware vendor. The benchmark configuration consisted of a (nonclustered) 64-way HP Integrity Superdome running HP-UX 11i v2 with Oracle Database 10g and used HP StorageWorks Virtual Arrays 7110 configured with 36 gigabyte and 73 gigabyte drives. With this result, HP now holds the top three TPC-C performance results, including the top Unix, Linux and Windows results. HP and Oracle have a long history of performance leadership. The combination of HP Integrity servers and Oracle has held a leadership position in single system online transaction processing (OLTP) performance across all other Linux and Unix solutions. Furthermore, HP also published the first TPC-C 64-bit Linux benchmark on Oracle Database 10g. These benchmark results follow the record-breaking benchmark on an HP Integrity server running Linux recently announced at OracleWorld San Francisco. In addition, HP Integrity servers, ranging from one- and two-processor to 64-processor systems, have established dozens of record benchmark results on multiple operating systems and workload categories.

5 Hardware Platforms Weekly, Issue 44 5 Gartner Dataquest Analysis This benchmark record is worth noting not just because it represents the first single system to break the 1 million tpmc barrier. While benchmarks do not necessarily indicate real-world performance and depend on the expertise of the vendor's benchmark teams, this does demonstrate that HP Itanium 2 servers are not wanting in performance potential. It validates many of the strong performance claims the Intel has been projecting for Itanium-based servers. The latest record gives HP five of the top 10 single systems scores (a testament to the effectiveness of its benchmark teams as well as its servers). Four of those HP scores are with Itanium 2 systems, and one is with the HP reduced instruction set computing central processing unit (PA-RISC). If the NEC Express 5800 score is included,halfthetop10singlesystemscoresusetheitanium2cpu.thisfurther demonstrates the powerful floating-point performance that this processor can bring to a server and what it can do for single system transaction performance. Of course, this race is far from over. IBM holds three positions on this list with Power 4 CPUs driving the p690. Thanks to Fujitsu, Ultra SPARC is on the list as the engine for the Primepower No doubt, these vendors have not finished posting scores and will push to further raise the bar. Along with this battle for benchmark highs comes the ongoing fight for 64-bit Unix market share, a battle that takes a lot more than high benchmark scores to win. But this particular record shows one thing if HP should falter in the fight for market share, it won't be because the Integrity Superdome cannot perform. Recently Published Research "SMBs Show Preferences for Security Services" By Jeffrey J. Hewitt (jeffrey.hewitt@gartner.com) Small and midsize businesses (SMBs) are turning to external service providers for security services. Understanding the criteria that determine what services SMBs buy will mean greater success for vendors in this market segment. (Gartner Dataquest, 5 November 2003 HARD-WW-DP-0585) "4Q03 Global PC Forecast Scenario Update: Stronger Growth Seen" We have increased our 2003 PC unit growth forecast, based on stronger-than-expected third quarter of 2003 results. However, factors supporting growth may be temporary, as opposed to sustaining. (Gartner Dataquest, 4 November 2003 HARD-WW-DP-0586) "User Attitudes to Color Printing in the Office, 2002 (Executive Summary)" Use of color printers in French, German and U.K. offices rose by over a third in Buyers like the lower prices and faster printing speeds of today's machines, but many are still put off by high running costs. (Gartner Dataquest, 6 November 2003 HARD-WW-EX-0435) "India: User Perception of PC Technology Trends and Budget Plans (Executive Summary)" Higher budgets and sliding price points will catalyze PC uptake in India, but increasing life spans could inhibit growth. Vendors must create demand rather than just pushing their products in the market. (Gartner Dataquest, 4 November 2003 HARD-WW-EX-0437)

6 6 Hardware Platforms Weekly, Issue 44 "India: Server and Storage Infrastructure Trends Survey (Executive Summary)" Forty-six percent of respondents surveyed in India indicated they would increase their 2003 server and storage spending budget. (Gartner Dataquest, 31 October 2003 HARD-WW-EX-0436) Press.gartner.com Press.gartner.com is designed to guide you through the correct procedure of obtaining a Gartner Dataquest analyst's quote. If your company would like to issue a press release quoting one of our analysts, you must submit your request to quote.requests@gartner.com. Standard requests will be approved within 48 hours. Gartner Conferences For more information on Gartner conferences, contact Ashley Pearce at or You can also ashley.pearce@gartner.com or visit Gartner and Gartner Dataquest host the IT industry's most respected conferences and strategic forums in locations around the world. For More Information... In the United States: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Gartner Interactive: The content herein is often based on late-breaking events whose sources are believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The conclusions, projections and recommendations represent Gartner's initial analysis. As a result, our positions are subject to refinements or major changes as Gartner analysts gather more information and perform further analysis. Entire contents 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden Gartner, Inc. and/or its Affiliates. All Rights Reserved