Operator

Your next question is from the line of Katherine Egbert with Jefferies.

Katherine Egbert – Jefferies & Co

Hi. Good afternoon. I want to talk about your non-GAAP operating margin. I mean it was up pretty nicely here in February. You have got it down a little bit for the May quarter. Can you tell us what you think steady state is in and if steady state is going to continue its improvement or not? Thanks.

Charles Peters

If you mean, Katherine, what are the success goals beyond the one year, the goal for this coming year is approximately 100 basis points improvement and I think that there is an opportunity for continuous improvement beyond that. So it''s not, we''re not thinking about flat operating margins. In terms of specifically Q1 we continue to invest in sales including sales training and so there are some cost in Q1 that relate to that but take it down a bit in Q1.

Katherine Egbert – Jefferies & Co

Okay, thanks, Charlie that''s perfect and then just as a follow up. Can you talk about the opportunity in VDI? Jim you mentioned in your prepared comments some wins around that? And then may be just make a comment on what you think about the network market? Thanks.

James Whitehurst

Sure. On VDI, quite frankly, we expected that market to develop very slowly and so we guided revenue around from that we''re really thinking more on the server side. It is still a nascent market, so I don''t have a good number, but I would say we are very pleasantly surprised at the amount of interest that''s coming to us in VDI. So I think that market is certainly developing faster than we thought. Again it''s very, very small base, so hard to come up with the number but we are very, very pleased with that. In terms of the network market, we are not a real player in the consumer space. We are an enterprise company providing enterprise support and so we really aren''t a player in that space. There are netbooks that are based on our Fedora distribution which is great, but in terms of part of our core business model we currently don''t play there.

Katherine Egbert – Jefferies & Co

Okay, thanks. Good job.

Tom McCallum

Next question please.

Operator

Your next question is from the line of Kash Rangan with Merrill Lynch.

Kash Rangan – Merrill Lynch

Hi thank you very much. I apologize for the overhead noise here and also sorry if this question has been asked. Jim and Charlie, I was wondering, if you could comment about how you, what''s your take on the IBM proposed acquisition of Sun. How that might impact your relationship with IBM? Does it strengthen it or really not change it at all given the open scenarios initiative that Sun has got going out for some time? And also secondly, I''m assuming that did you probably look at the server unit growth rates that IDC has been putting out. I know that they have certain other levers that can help your model, but I''m wondering what the underpinning assumption is behind your billings and cash flow projections as you model out server unit growth. What kind of server unit growth rate decline are you modeling behind your cash flow and bookings assumptions, I was just curios. Thank you very much.

Charles Peters

With regards to the rumors on IBM and Sun, at this point the rumors and…so right now we are keeping our head down both serving our customers, obviously we have relationships with both IBM and Sun. But right now we are worried about serving our customers. And we will see what happens there as we get more time free.