EMC 2011 Annual Report Download - page 10

Table of Contents
and Cork, Ireland manufacturing facilities have achieved OHSAS 18001 certification, an international standard for facilities with world-class safety and health
management systems. We also maintain Support Center Practices certification for our primary customer support centers. These internationally-recognized
endorsements of ongoing quality and environmental management are among the highest levels of certifications available.
We maintain a robust Supplier Code of Conduct, actively manage recycling processes for our returned products, have won an Environmental Steward
Award and are also certified by the Environmental Protection Agency as a Smartway Transport Partner.
Our products are assembled and tested primarily at our facilities in the United States and Ireland or at global manufacturing service suppliers. We work
closely with our suppliers to design, assemble and test product components in accordance with production standards and quality controls established by us.
Our software products are designed, developed and tested primarily at our facilities in the United States and abroad. The products are tested to meet our
quality standards.
Product Components
We purchase many sophisticated components and products from an approved list of qualified suppliers. Our products utilize industry-standard and
semi-custom components and subsystems. Among the most important components that we use are disk drives, solid-state 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 2011, 2010 and 2009, our
research and development ("R&D") expenses totaled $2,149.8 million, $1,888.0 million and $1,627.5 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, protection, security, management and intelligence, data analytics or 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, information governance, 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.
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