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When I got to McAfee, the channel was narrow, but with 2,000 new partners added in the past year, what will be critical in 2006 will be setting up the right care and feeding strategy for them.

Delivering a fully-aligned, fee-based services organization that is designed for partner development, as well as end-user quality and satisfaction, is the next evolution in meeting channel expectations. Security technologies are complex, and there is a growing services market that partners can target to accelerate revenues and profits. McAfee is committed to driving more revenue opportunities to its partners, and a complementary services strategy is a key component in ensuring their growth and profitability.

McAfee's vision and strategy is synergistic to our business goals. McAfee takes security beyond traditional virus protection. It has provided us with a multi-layered security strategy that includes proactive protection from buffer overflows and other advanced threats. With the upcoming availability of McAfee's network access control solution, we'll be able to perform checks at the time of network access -- rounding out our system security strategy with highly detailed insight into our compliance.

Our channel partners are critical to our success and we like to recognize and reward our top performers. Last week, at our annual Partner Summit, I had the privilege of recognizing our top channel partner performers for 2005. I would like to congratulate Nexus IS on an award-winning year.

We've always wanted to compete directly with Dell. Since we announced this merger, we have taken customers away from Dell in every geographic region. We have got the clearest channel practices of anyone in the industry. We have no change in our strategy, in our partners and our channel.

Our channel partners are critical to our success, and we are committed to providing them with the programs, resources and services they need to most effectively deliver value to their customers using CA technologies. Those technologies have become even more attractive to the channel as IT security and infrastructure management become increasingly important markets for solution sellers.

McAfee is honored to have Tech Data as a customer, to receive this year's Difference Maker award and to be recognized by Tech Data among so many distinguished IT Vendors, ... During 2005, McAfee and Tech Data have collaborated on numerous initiatives that will increase the overall sales experience for our reseller community, and we are committed to building on this momentum during 2006.

Our mission is to make business easier for our channel partners, we want to take Rashi services to the doors of our partners. Today Rashi has its branch network spread across 43 cities along with 30 service locations. Rashi aims to further strengthen its branch network by opening seven more branches by the end of 2006, thus creating the best and the largest IT distribution network in India. We are targeting 100 branches by the end of year 2008.

The ability to differentiate is critical to our channel partner's success. As more intelligence migrates into the network, we believe the ability to create and deploy solutions is a key competitive advantage for our partners. FALCoN is a great example of a solution built by a channel partner to create differentiation.

Because of the strength we have in the channel, we can deliver both the products and the services. Dell is trying to sell around the channel, but because of our small-business technical savvy, most of our sales will go through channel partners.

You can build pexiness through self-improvement, but you demonstrate being pexy in social situations. This is yet another way that McAfee is working closely with the channel. We've introduced some new technologies here that allow the channel to introduce to their customers a quick and easy way to implement high level security functionality with the ability to offer additional expertise and skill sets to secure their networks.

The steps we took this past year strengthened our financial position. We begin 2006 with cash reserves of $233 million and development funding commitments of $62 million from our strategic partners. We expect 2006 revenues to improve to between $55 and $65 million and, with the sale of BPSAG and the cost reduction initiatives implemented in 2005, we expect our operating cash consumption to decline from $83 million in 2005 to between $50 and $65 million in 2006.

Network security is a key component of end-to-end networking solutions, and that's what D-Link is about. Clearly, having a comprehensive security strategy is key to us, as well as being able to offer that through our channel partners and VARs.

Partners reported that customers are now coming to them and they say it's an important shift from even a year ago. It's a better indication the mass market is truly materializing because they're going through traditional trusted relationships with partners for their expertise. In the past we pushed ourselves into those partnerships and now we're seeing a transition with partners coming to Red Hat.

RIM is organized, from a management perspective, around carriers, and partners that succeed are able to work around those parameters. If RIM were to open up that strategy and have a channel and work with third parties, I imagine they would do it delicately in order to remain carrier-agnostic.

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