"Quantum Corporation generates its revenue earning from the sale of products, systems and services through its sales force and a progressive team of channel partners to reach end user customers, which range from small businesses and satellite offices to government agencies and large, multinational corporations. The products are sold under both the Quantum brand name and the names of various OEM customers, which is one of the primary strategies to conduct sales. Nowadays, Quantum Corporation faces a variety of challenges and opportunities in responding to the competitiveness of the technology market which can be characterized by rapid change, evolving customer demands and strong competition, including competitors who are also significant customers or suppliers. Quantum Corporation also features software selections which provide disk and tape integration capabilities with the core de-duplication and replication technologies. In addition, the corporation offers a broad range of coverage options of providing professional and comprehensive supports for information technology.
Quantum Corporation has been through a series of significant changes during fiscal 2010, including a challenging economic environment, an altered relationship with EMC, the pressures of a constrained debt market as well as market transitions. Throughout these changes, Quantum Corporation continued to focus on executing the core business strategy, leading to a significantly improved business model with growth opportunities. Quantum Corporation introduced a number of new products and innovations which expanded its core products and solutions portfolio. By adjusting the portfolio Quantum Corporation was able to demonstrate clearly about the edge-to-core solutions that it dedicates to customers and end users. Although the market for IT and storage improved during fiscal 2010, there is still an environment of caution. For example, storage projects continue to be highly scrutinized within companies and the sales had declined due to the change of consumer trend. However, there was measurable improvement about IT budgets became more available, channel inventories began to replenish and, as a result, the industry had modest growth. During fiscal 2010, new products and innovations included the NAS-based DXi6500 family and DXi4500 family for midrange customers, the Scalar i6000 as the new enterprise tape library, and the version 4.0 of the Quantum Vision™ software, which supports a tiered storage strategy by enhancing centralized monitoring and reporting of Scalar tape libraries and DXi-Series disk backup and de-duplication products. Quantum Corporation had realized that in order to maintain strong foundation in the market, the company needs to improve the overall performance by continuing to launch new products."
"As a leading global manufacturer in backup, recovery and archive, Quantum Corporation offers a comprehensive range of product selections, included disk, tape and software solutions. Its solutions are designed to provide IT departments in a wide variety of organizations with innovative and dependable tools for protecting, retaining and accessing their digital assets. The products are sold through the branded channels and Original Equipment Manufacturer (OEMs) such as Dell, HP and IBM. The product segments can be divided into three broad categories: (1) tape automation systems, (2) disk backup systems and data management software and (3) devices and media (e.g. removable disk drives, standalone tape drives and media products)."
Scalar i6000 The Scalar i6000 tape libraries are specifically designed for the archive and long-term data retention needs for enterprise-level.
Scalar i500 The intelligent tape library platform that gives growing midrange storage environments faster, easier, and more reliable data protection by providing industry-leading management, scalability, and reliability.
Scalar i40/i80 Bringing intelligent iLayer benefits to small and medium-sized businesses. Expands to up to 40 slots (i40) or 80 slots (i80) of capacity-on-demand.
SuperLoader 3 Easy automation at an affordable price. Expands from 8 to 16 slots.
StorNext High-speed file sharing and cost-efficient data protection software for companies wanting to dramatically increase performance.
StorNext FX Ideal for time-sensitive environments, including broadcast and postproduction.
Scalar Key Manager Simple and reliable data encryption software for companies of all sizes.
Vision Reporting Software Simplified management of disk-based backup and tape libraries.
Devices and Media LTO Tape Drives Providing security, reliability, and high performance for small and medium-size businesses
DLT Tape Drives Featuring scalability and backward-read compatibility as your business grows
DAT/DDS Tape Drives Offering simple, reliable, and affordable data protection for smaller storage environments
RDX Removable Disk Drives Fast, simple, reliable and affordable disk-based data protection
GoVault Giving your small business everything it needs for fast, simple, and affordable backups
"Information Technology departments continue to experience pressure around cost effectively, storing rapidly increasing amounts of data and the recent economic downturn. Even companies still need save data of all types, structured and unstructured, for both near and long-term retention. IT managers still face obstacles in the technology industry with rapid data growth, demands for ready access to data, expanding retention policies and laws regarding compliance, and limited IT budget. Many companies experience rapid data growth year over year and have data retention policies that require them to save data for lengthy periods or even forever. This is one factor driving the need for long-term data retention solutions and archive technologies. Additionally, many companies face regulatory requirements that mandate both long-term preservation of and secure access to data. Even in industries without strong regulatory requirements, companies are recognizing the value of securing access to their data as good business practice. This rapid data growth combined with the need for ready access to data is driving the steady expansion of newer technologies such as de-duplication and replication to help address these needs. Customers are increasingly looking to deploy these technologies at various points in their organizations to take advantage of storage optimization, effective data movement and increased disaster recovery capabilities. De-duplication technology is moving from being available primarily in dedicated appliances to being embedded in a broad variety of solutions, including most backup software. Quantum is a specialist in the backup, recovery and archive business and offers worldwide support and maintenance from offices around the world to meet its customers’ needs."
In the recent years, backup, recovery and archive become a major focus for customers who face a number of challenges in managing and protecting their data which continues to grow significantly year after year. Customers’ demands for larger data capacity and high recovery speed have also increased significantly through years, along with the concerns of data protection and intellectual asset security. Quantum Corporation takes these customer challenges, and builds a portfolio of integrated solutions encompassing disk, tape, software and services to enable users to protect and manage data from the edge of the network to the core data center. During 2011, Quantum Corporation intends to leverage growth through increased engagement with the channel partners to increase disk backup and software solutions revenue in addition to gaining share in the open systems tape automation market. As Quantum Corporation expands its branded business, it also intends to continue leveraging the leadership in de-duplication and replication technology to create an open systems ecosystem with compatibility across multiple vendors’ solutions. 
"Quantum Corporation has customers who are also its primary rivals, and most of its competitors often have greater financial, technical, manufacturing, marketing or other resources than Quantum Corporation does. In the highly competitive tape automation market, Quantum Corporation primarily competes for midrange and enterprise reseller and end user business with Dell, IBM and Oracle as well as HP through its OEM relationship with other tape automation suppliers. Additionally, the competitive landscape continues to change due to merger and acquisition activity. The disk backup solutions compete with products sold by EMC, HP, IBM and NetApp, Inc. (“NetApp”). Additionally, a number of software companies that have traditionally been partners with Quantum Corporation have added deduplication to their products and will at times compete with us, including CommVault Systems, Inc. and Symantec Corporation. At the storage device level, Quantum Corporation’s main competitors in the market for performance tape drives are HP, IBM and Tandberg Data. Both IBM and HP develop and sell their own LTO tape drives, which compete with Quantum’s LTO and DLT-S4 offerings. Quantum’s value line tape drives, DAT/DDS and DLT-V4, largely compete with those from HP." 
IBM (International Business Machine)
|Earning Per Share||2010||2009||Year-to-Year Change|
|Assuming dilution||$11.52||$ 10.01||15.1%|
|Net Earning Per Share||2010||2009||2008|
"According to the EPS data, IBM greatly outperformed Quantum and HP in the stock market with Quantum has the lowest EPS of 0.02. Most current price of QTM is $31.11 followed by HPQ's $41.04 and IBM's $170.37. However, IBM'S storage revenue decreased 12.0 percent (11 percent adjusted for currency) in 2009 versus 2008. Total disk revenue decreased 9 percent versus 2008. These decreases were driven by declines in mid-range disk revenue of 18 percent and decreased Enterprise Disk revenue of 6 percent. In the fourth quarter, the company introduced the DS8700 product, the latest addition to the DS8000 line of high-end disk systems. The company’s storage acquisitions, XIV and Diligent, had strong performance. XIV has added over 400 new customers since the acquisition. Tape revenue declined 20 percent in 2009 versus 2008.  As for HP, Enterprise Storage and Servers (ESS) net revenue increased 21.4% (18.9% when adjusted for currency) for 2010. ESS blades revenue increased by 37% in 2010. Industry standard servers, Storage, Business critical systems (ISS) net revenue increased by 35% in 2010, driven primarily by unit volume growth coupled with increased average unit prices due to improving market conditions and demand for the latest generation of ISS products.  Storage net revenue increased by 9% in 2010, driven primarily by strong performance in products related to HP's acquisition of Lefthand Networks, and growth in high-end disk products and storage networking products."
Threat of the entry of new competitors could be low because the IT industry is so competitive and new competitors would find to hard to survive without a certain level of economic scale. For example, since Quantum is a leading global IT firm, it will be easier for Quantum to recruit better employees/consultants with higher salary offerings and offer lower prices with a large economic scale.
Threat of substitute products or services could be high since Quantum is not the only company who offers IT products. The competition among IT firms is highly intense, and today's customers tend to switch to another product easily once they do not feel fully satisfied about the old one. IT firms need to innovate continuously in order to prevent customer loyalty declining and products switching.
Bargaining power of customers (buyers) could be high since there is a rich variety of IT products in the market today, and customers will compare the prices, level of function, design, warranty, customer services, and product duration among products. As for, Quantum, some of the competitors are also its customers, so in this case, Quantum has to remain a good relationship with its customers, and also has to compete with them.
Bargaining power of suppliers should be really low since Quantum is the leading independent supplier of backup, recovery and archive solutions. It does not lose any bargaining power to any supplier.
Intensity of competitive rivalry should be really high since the demand of high recovery speed, multi-tiered data storing, and affordable products had increased significantly, but with the declining of IT departments' budget and economic downturn, the competition among IT firms has become seriously intense these years.
Strength: Quantum is a leading storage company offers a rich variety of products, in which expands the products selection for customers and enhances product differentiation. Also, the company provides high quality products and business solution to small size of business to government agencies and large, multinational corporations. In addition, the strong force in sales and marketing is one of the key elements which leads Quantum into today’s success. Quantum sells its products directly to the end users, and also sells them to value-added resellers (“VARs”), original equipment manufacturers (“OEMs”), or other suppliers. Indirect sales strategy allows Quantum to reach a wide range of customers.
Weakness: A large percentage of Quantum’s sales come from a few customers, some of which are also competitors, and these customers generally have no minimum or long-term purchase commitments. Customers that are also competitors becoming more competitive in the market and might reduce their purchase of Quantum’s products 
Opportunity: Since the demands of data storage and high quality IT products are increasing significantly, IT/data storage firms tend to launch new products continuously and aggressively to merge with other IT firms or suppliers. For example, Quantum announced it has entered into an agreement with NetApp, enabling the company to resell Quantum's StorNext® software. Effective immediately, NetApp will sell StorNext File System and StorNext Storage Manager(TM) software through its worldwide sales network. 
Threat: Competition has increased and evolved, and may increasingly intensify, in the tape and disk storage products markets as a result of competitors introducing products based on new technology standards, and merger and acquisition activity, which could materially and adversely affect Quantum’s business, financial condition and results of operations. 
"Quantum‘s sales and marketing departments are focused exclusively on backup, recovery and archive solutions for its customers. Quantum offers products to corporations in any size. The sales operations are based in Bellevue, Washington; Irvine and San Jose, California; Munich, Germany; Paris, France; Singapore City, Singapore and Shanghai, China, with regional and field offices throughout North America, Europe and Asia. Quantum utilizes distributors, VARs, OEMs and direct marketing resellers. We also maintain a reseller agreement with EMC Corporation, through which EMC sells Quantum-branded tape automation systems to its customer base and through its own network of resellers.  Additionally, we sell directly to a select number of large corporate entities and governmental agencies. In January 2010, Quantum was recognized as one of the best channel vendors by Business Solutions Magazine and it was ranked in the top 15 percent of all storage vendors for reliable products and exceptional service."
Product: As the leading global specialist in backup, recovery, and archive. Quantum provides products and services from small businesses to multinational enterprises, more than 50,000 customers trust Quantum to solve their data protection, retention and management challenges. Quantum has a wide range of product selections, including product models from tape automation systems to disk backup systems and data management software to devices and media. Product differentiation builds strong competitiveness for Quantum in the market. 
Price:With a wide range of customer level, Quantum tends to produce cost-effective products in order to fit customers from different financial levels with affordable prices.
Place:Quantum sells their products through many different distribution channels through more than 100 countries. Distribution channels include value-added resellers (“VARs”), original equipment manufacturers (“OEMs”), other suppliers, and direct-sales from Quantum. Quantum's products are considered highly accessible to customers.
Promotion:Quantum generates its sale revenue through strong and professional sales and marketing forces which can satisfy all the customers' needs. Also, Quantum sells its products to several OEM customers who generally resell its hardware products under their own brand name and typically assume responsibility for product sales, end user service and support.These OEM relationships enable Quantum to reach end users not served by its branded distribution channels or its direct sales force. 
For the year ended March 31 (In thousands, except per-share data)
|Statement of Operations Data||2010||2009||2008|
|Total revenue||$681,427||$ 808,972||$975,702|
|Total cost of revenue||401,390||504,658||656,598|
|Income(loss) from operations||29,309||(329,925)||(8,097)|
|Basic net income(loss) per share||0.08||(1.17)||(0.03)|
|Diluted net income(loss) per share||0.02||(1.17)||(0.03)|
"Even though the revenue sales were not as high as year 2009 and 2008, Quantum still achieved it primary goals for fiscal 2010, which was improving the operating results and addressing the refinancing requirement of our convertible debt. The operating income increased $359.2 million to $29.3 million in fiscal 2010 from an operating loss of $329.9 million in fiscal 2009. It also increased our gross margin percentage and reduced operating expenses from 634 million in2009 to 250 million in 2010. Although there has been measurable improvement in the IT and storage purchasing environment during fiscal 2010, spending has not returned to pre-recession levels and was reflected in lower revenues in each quarter of 2010 compared to the corresponding quarter of 2009. Decreased demand in the global IT market has increased competition for sales resulting in pricing pressure on the majority of our products. Between the recession and the continued strategy of shifting its sales mix toward higher margin opportunities, revenue decreases in 2010 were primarily due to expected reductions in OEM revenue, including tape automation systems and devices and media. 
In addition, Quantun Corporation may explore refinancing opportunities that reduce interest expense on its debt or provide other favorable terms. During fiscal 2010, Quantum paid $61.9 million in principal on its senior secured term loan, decreasing its acquisition-related term debt to $186.1 million at March 31, 2010. Quantum has reduced its acquisition-related debt by 63% since its inception in August 2006. The company also reduced its debt level another $16.2 million from the convertible debt refinancing capital structure solution."
|Quantum Corporation (QTM)|
|Gross Margin (%)||41.10|
|Operating Margin (%)||5.00|
|EBITDA ($ million)||72.25|
|FCF ($ million)||92|
|Asset Turnover (Avg.)||1.29||1.00||0.89|
"Due to the economic downturn with limited IT budgets and changes of customer consuming trend, Quantum Corporation performed poorly in both sales and stock market in year 2008 and 2009, especially 2009. After that, the company re-designs the strategy to launch new products and to build efficient and highly effective operating systems. Quantum Corporation reached positive ROA and ROIC in 2010."