Growing Our Business Opportunity

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2 Growing Our Business Opportunity Eric Starkloff, Vice President of Marketing

3 Key Points One platform that serves multiple opportunities Strong value proposition in Embedded systems Changing dynamics in Test and Measurement NI s differentiation through PXI and software NI s growing opportunity and investment in RF 3

4 Graphical System Design A Platform-Based Approach for Measurement and Control Test Monitor Embedded Control Robotics Desktops and PC-Based DAQ PXI and Modular Instruments RIO and Custom Designs Open Connectivity With Third-Party I/O 4

5 NI Growth Opportunity Areas Test and Measurement Embedded Systems General Purpose Wireless and Communications Programmable Logic Controllers Semiconductor Real-Time Test Custom Design Structural Test SBC/ Embedded Total Market: $21 Billion Total Market: $40 Billion Source: Frost & Sullivan, Prime Data and NI Estimates 5

6 Embedded Opportunity Total 2012 Market Size: Greater Than $40 Billion PLC/PAC Custom Design SBC/Embedded Plants and machine builders want better control capabilities in their automated systems. NI provides optimized automation. There is a trend toward using FPGAs and higher-level tools for a more integrated toolchain. NI makes design easier. There is a need for open, PCbased architectures to quickly develop solutions. NI delivers quality measurements. >$13 Billion >$24 Billion $3 Billion Source: NI Estimates Estimates include hardware, software and services. Source: NI Estimates 6

7 NI s Value Proposition in Embedded Systems: Embedded Design Productivity Study NI Customers General Embedded Market Size of core embedded team (average # of SW/HW/firmware engineers) Complete projects in (months) On/ahead of schedule 58% 42% Behind schedule/late 38% 55% Base: All qualified respondents. A7a-d. How many of the following types of engineers are on your current embedded project team? Number of software engineers, number of hardware engineers, number of firmware engineers, Total number of engineers on current embedded project, (Textbox questions.) A9b. Thinking now about the last embedded project you completed using NI products (no longer in development), how many months did that project take to finish? (Textbox question.) A9b. Was that project completed... (Single response question.) NI 2012 Embedded Market Study: NI = , Margin of error +/ %; UBM 2012 Embedded Market Study: EET = , Margin of error +/ %. 7

8 Embedded Development Productivity Gains at Dynapower The LabVIEW RIO platform and method of development reduced our development time from one to two years to under six months. - Kyle Clark, Advanced Systems Engineering Manager, Dynapower Company Solar Wind Electric Vehicles Grid Storage 8

9 Lime Instruments Grows Market Share 61% by Deploying the NI Embedded Control and Monitoring Platform Market Share (Horsepower) 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Lime vs. Top 3 industry players HAL SLB BHI LIME What most C programmers take two years to do, we can accomplish in a couple of months. - Robert Stewart, CEO, Lime Instruments, LLC 9

10 Test and Measurement Opportunity Total 2012 Market Size: $21 Billion Electrical/ Electronic Wireless/RF Structural/ Physical Real-Time Test Semiconductor $5.3 Billion $5.0 Billion $4.0 Billion $2.6 Billion $4.0 Billion Source: Frost & Sullivan, Prime Data and NI Estimates Estimates include hardware, software and services. Source: Prime Data 10 and NI Estimates

11 Selling More to Our Existing Customers 2011 Market Share 2014 Market Share Traditional Instruments, % share Modular Instruments (includes PXI), % share 68% 3-year growth projections for PXI Source: Frost & Sullivan 2011 Modular Instruments Study 11

12 Amounts in Millions USD PXI Industry Forecast $1,200 $1,000 $800 PXI Revenue VXI Revenue AXIe Revenue 18% Forecasted CAGR for PXI $600 $400 $200 $ Source: Frost & Sullivan preliminary report High Growth Test & Measurement Market Opportunity: Modular Instruments, June 22,

13 PXI is currently the dominant standard for modular instrumentation. It s a mature technology and is widely used. (September 2010) 13

14 PXI is currently the dominant standard for modular instrumentation. It s a mature technology and is widely used. (September 2010) National Instruments is the undeniable leader in PXI-based test and measurement equipment. (July 2011) 14

15 Disrupting the Traditional Market With PXI The World s First Vector Signal Transceiver FPGA-Based Hardware Architecture Graphically Design Your Instrument in NI LabVIEW FPGA 15

16 Software-Designed Instrumentation Completely Open-Source Driver Ensures Ultimate Flexibility The Vector Signal Transceiver is ready-to-run out of the box, but the driver is written entirely in LabVIEW, giving direct access to the instruments I/O. 16

17 Differentiation Through LabVIEW RIO Architecture Leveraged R&D Investment Integrated platform technology scales across Test and Embedded Productivity The industry s only architecture that targets FPGAs with LabVIEW for system design Cost Savings Flexibility through reconfigurable I/O and adaptability to future standards 17

18 Lowering the Cost of Test NI PXIe-5644R Vector Signal Transceiver Agilent PXA + MXG ac Performance EVM (80 MHz BW, 256-QAM) ac Test Time EVM (80 MHz BW, 256-QAM) -46 db -44 db 30 ms 500 ms WLAN Test Solution Total Cost $60k ~$130k Source: Standard list pricing in USD as of August

19 Qualcomm PXI Performance vs. Traditional Instruments a/b/g Early 2000s Traditional Rack and Stack Source: Qualcomm 19

20 Qualcomm PXI Performance vs. Traditional Instruments a/b/g a/b/g/n Early 2000s Traditional Rack and Stack 2007 NI PXI RF Instrumentation 10 to 20X Faster Source: Qualcomm 20

21 Qualcomm PXI Performance vs. Traditional Instruments a/b/g a/b/g/n a/b/g/n/ac Early 2000s Traditional Rack and Stack 2007 NI PXI RF Instrumentation 2012 NI Vector Signal Transceiver 10 to 20X Faster 200X Faster Source: Qualcomm 21

22 RF Engineering Experience NI s Growing Investment in RF Bangalore, India RF software (cellular, wireless connectivity, navigation, and so on) Santa Rosa and San Jose, California RF hardware design centers Austin, Texas RF hardware design, software driver, and utilities Global RF systems engineers 22

23 Increased Our Brand in RF 2012 International 2012 International Microwave Microwave Symposium Symposium (IMS) (IMS) RF Summit at NIWeek RF Summit at NIWeek 23

24 Wireless Everywhere The proliferation of mobile devices, including smartphones and other mobile devices, will continue to be the key growth driver into the foreseeable future. - Jessy Cavazos, Industry Director, Frost & Sullivan 24

25 World-Class Technology Ecosystem Software Hardware COMMUNITY 200,000+ online members 450+ registered user groups 3,000+ job postings online 8,000 classrooms using NI tools 74 peer-driven support forums CONNECTIVITY 9,000+ instrument drivers 8,000+ example programs 1,000+ motion drives 1,000+ smart sensors 1,000+ third-party PAC devices COLLABORATION 100+ third-party add-ons 700+ NI Alliance Partners 1,000+ value-added resellers 35+ training courses COMPUTING TECHNOLOGY Intel, Microsoft, Freescale, Wind River Multicore and real-time technology FPGA Xilinx Virtex and Spartan Reconfigurable hardware IP Control and signal processing IP and I/O drivers Built-in graphical IP, integrated user IP I/O Analog Devices, Texas Instruments Connect to any sensor and actuator BUS PCI/PCI Express, Ethernet, USB, wireless, deterministic Ethernet, open architecture 25

26 Summary NI delivers a single platform to address multiple market opportunities Strong successes in Embedded due to productivity gains from LabVIEW RIO architecture In Test, PXI gaining market share from 85% of market currently served by traditional instrumentation Key investment area in RF and Wireless Test 26

27 Q & A