EMC 2009 Annual Report Download - page 9

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Table of Contents
important components that we use are disk drives, high density memory components, microcontrollers and power supplies. While such components are
generally available, we have experienced delivery delays from time to time because of high industry demand or the inability of some vendors to consistently
meet our quality or delivery requirements.
Research and Development
We continually enhance our existing products and develop new products to meet changing customer requirements. In 2009, 2008 and 2007, our
research and development ("R&D") expenses totaled $1,627.5 million, $1,721.3 million and $1,526.9 million, respectively. We support our R&D efforts
through state-of-the-art development labs worldwide. See Item 2, Properties.
Backlog
We produce our products on the basis of our forecast of near-term demand and maintain inventory in advance of receipt of firm orders from customers.
We configure to customer specifications and generally deliver products shortly after receipt of the order. Service engagements are also included in certain
orders. Customers generally may reschedule or cancel orders with little or no penalty. We believe that our backlog at any particular time is not meaningful
because it is not necessarily indicative of future sales levels.
Competition
We compete with many companies in the markets we serve, including companies that offer a broad spectrum of IT products and services and others that
offer specific information storage, content management, security or server virtualization products or services. We believe that most of these companies
compete based on their market presence, products, service or price. Some of these companies also compete by offering information storage, content
management, security or virtualization-related products or services, together with other IT products or services, at minimal or no additional cost in order to
preserve or gain market share.
We believe that we have a number of competitive advantages over these companies, including product, distribution and service. We believe the
advantages in our products include quality, breadth of offerings, performance, functionality, scalability, availability, interoperability, connectivity, time-to-
market enhancements and total value of ownership. We believe our advantages in distribution include the world's largest information infrastructure-focused
direct sales force and a broad network of channel partners. We believe our advantages in service include our ability to provide our customers with a full range
of expertise before, during and after their purchase of solutions from us or other vendors.
Seasonality
We generally experience the lowest demand for our products and services in the first quarter of the year and the greatest demand for our products and
services in the last quarter of the year, which is consistent with the seasonality of the IT industry as a whole.
Intellectual Property
We generally rely on patent, copyright, trademark and trade secret laws and contract rights to establish and maintain our proprietary rights in our
technology and products. While our intellectual property rights are important to our success, we believe that our business as a whole is not materially
dependent on any particular patent, trademark, license or other intellectual property right.
We have been granted or own by assignment approximately 2,300 patents issued by, and have approximately 1,450 patent applications pending with,
the U.S. Patent and Trademark Office, as well as a corresponding number of international patents and patent applications. While the durations of our patents
vary, we believe that the durations of our patents are adequate relative to the expected lives of our products.
We have used, registered or applied to register certain trademarks and copyrights in the United States and in other countries. We also license certain
technology from third parties for use in our products and processes and license some of our technologies to third parties.
Employees
As of December 31, 2009, we had approximately 43,200 employees worldwide, of which approximately 7,100 were employed by or working on behalf
of VMware. None of our domestic employees is represented by a labor union, and we have never suffered an interruption of business as a result of a labor
dispute. We consider our relations with our employees to be good.
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