BT, HP Expand Alliance With Enhanced Offerings to Help Customers Transform IT Environments.

BUDAPEST, Hungary -- HP (NYSE:HPQ) and BT (NYSE:BT) today announced an expansion of their alliance to meet growing customer demands for standardized and flexible collaborative IT and network services around the globe.

The strengthened alliance positions the two companies as preferred partners in the management of outsourced IT and network services and builds on a successful three-year go-to-market model that has attracted more than $1.5 billion in contract revenue since 2004 and more than 25 customers, including FirstGroup, Aker Kvaerner and Anglo-American.

Customers increasingly require additional capabilities from both companies to help transform their IT environments, drive innovation across their operations and improve business effectiveness and efficiency. The companies' chief executive officers, Mark Hurd of HP and Ben Verwaayen of BT, discussed these opportunities yesterday with an audience of more than 100 global chief information officers and corporate customers in Budapest and Valencia, on the third anniversary of the alliance.

The joint capabilities offered by the BT HP Alliance are designed to improve the overall customer experience and help customers achieve better business outcomes. The enhanced offerings are based on the ITIL-based integrated services architecture that has been developed by the alliance and enables customers to reduce risk and shorten the time to implement changes in their IT environments. These offerings will help customers provision global converged network and IT solutions, from the desktop to the data center.

As part of a multi-year agreement, HP will provide BT with the IT infrastructure components of servers, storage, software and services to accelerate and expand BT's service transformation. HP also will help BT transform its IT infrastructure into a service-oriented architecture to support new customer business models.

In parallel, BT becomes a key enabler of HP's own global IT transformation project, which is focused on improving service and reducing costs, by providing and managing high-performance connectivity between HP's consolidated U.S. data centers and 143 sites in Europe, the Middle East and Africa.

"Our customers have benefited from the BT HP Alliance over the past three years and we are committed to further strengthening our offerings to provide them with enhanced global solutions for their networked IT needs," said Hurd. "We will continue to work closely with BT to ensure that our alliance delivers truly integrated services that result in better business outcomes for our customers."

Verwaayen said: "Customers will benefit from the unique approach taken by our two companies in improving service and operational efficiencies. The way we are working together will ensure our customers' demands for collaborative IT and networked services are met. Our alliance is designed to bring the value-added services offering that our customers want."

About the BT HP Alliance

The BT HP Alliance brings together the world-class capabilities of HP and BT to provide a full IT and telecommunications service capability in a single service offering. Developing and delivering integrated, seamless solutions for customers, the alliance presents a single point of contact to enterprises for end-to-end service delivery. This provides improved service, increased flexibility and reduced risk for the enterprise.

About BT

BT is one of the world's leading providers of communications solutions and services operating in 170 countries. Its principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services. BT consists principally of four lines of business: BT Global Services, Openreach, BT Retail and BT Wholesale.

In the year ended 31 March 2007, BT Group plc's revenue was PS20,223 million with profit before taxation of PS2,495 million.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York. For more information, visit www.bt.com/aboutbt.

About HP

HP focuses on simplifying technology experiences for all of its customers - from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world's largest IT companies, with revenue totaling $97.1 billion for the four fiscal quarters ended April 30, 2007. More information about HP is available at www.hp.com.

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