Compaq's New Build-to-Order Deskpro Models Added to U.S. Air Force Desktop V Contract.

HOUSTON--(BUSINESS WIRE)--Aug. 19, 1997--

World's Leading PC Manufacturer Broadens Product Availability to

U.S. Government

Addressing the needs of the U.S. Air Force and other federal government customers during their most active quarter for purchases, Compaq Computer Corporation (NYSE:CPQ), the number one global supplier of personal computers, announced today that select models of its new build-to-order Deskpro PCs have been added to the USAF Desktop V (five) contract, held by Hughes Data Systems. This move allows Desktop V customers even greater access to Compaq's world-class personal computing solutions, enabling them to better meet their expanding technology requirements. The potential value of this contract to Compaq is estimated to be $120 million over the remaining life of Desktop V.

Available immediately through the Desktop V contract, the feature-rich, value-oriented Compaq Deskpro 2000 models, which include 200 MHz Intel Pentium processors with MMX technology or 200 MHz Pentium Pro processors, are among Compaq's first build-to-order products announced last month. With each Deskpro 2000, Desktop V customers also receive a five-year, worldwide limited warranty(a) and free software upgrades through 1999.

"Compaq continues to strengthen its growing business of providing comprehensive technology solutions to the government marketplace," said Don Weatherson, Vice President, Government and Education, Compaq Computer Corporation. "We worked closely with Hughes and the U.S. Air Force to be able to offer Compaq's newest Deskpros -- within two weeks of their introduction -- on the Desktop V contract. As a result, federal customers now can easily obtain Compaq's world-class products through one of the premier contracts in the federal space."

Deskpro 2000 Models - Affordable, Manageable Desktop PCs

Delivering an excellent balance of affordability and performance for the value-conscious federal government buyer, the contract offers three specially-configured models of the Compaq Deskpro 2000: the Compaq Deskpro 2000 Model 5200X/2100, a desktop PC with 200 MHz Pentium processor with MMX technology, 2.1GB EIDE SMART II Hard Drive, 16MB SDRAM and a 16X MAX Slot Load CD-ROM Drive(b); the Compaq Deskpro 2000 Model 5200X/3200, a mini-tower form-factor with 200 MHz Pentium processor with MMX technology, 3.2GB EIDE SMART II Hard Drive, 32MB SDRAM and a 16X MAX Slot Load CD-ROM Drive(c); and the Compaq Deskpro 2000 Model 6200/2500, a mid-tower PC with 200 MHz Pentium Pro processor, 2.5GB SMART EIDE Hard Drive, 32MB RAM, 8X CD-ROM Drive and Microsoft Windows NT Workstation version 4.0.

Under this contract, all three Compaq Deskpro models come with Microsoft Office 97 software (Professional Edition), free software upgrades through 1999, a PC Card Reader (Outback Style) and a five-year, worldwide warranty. In addition, both Compaq Deskpro 2000/5200 models are offered with a choice of Microsoft Windows 95 or Microsoft Windows NT Workstation version 4.0.

Leading the industry in manageability features, the Deskpro 2000 models incorporate Compaq's Intelligent Manageability, enabling users to manage costs for the product's lifetime and making the PCs easier to manage from a central location on the network. All Compaq Deskpro 2000 models incorporating Pentium processors with MMX technology include additional new Compaq Enhanced Intelligent Manageability features:

Asset Management:

-- DMI BIOS support (ROM BIOS support for industry standard Desktop Management Interface instrumentation enabling a systems administrator to obtain information about the system's components including processor features and system capabilities); -- Serial Presence Detect (providing asset information on system memory);

Configuration Management:

-- Remote ROM Flash (secures flashing of Deskpro ROMs over the network using third-party PC LAN management utilities); -- Remote Security Management (enables consistent deployment and control of security parameters from any location);

Fault Management:

-- SMART II Hard Drives with Prefailure Warranty(d) (tests the entire hard drive - including all data and all sectors - during periods of inactivity); -- Monitor Fault Diagnostics (notifies network administrator of monitor temperature and operational faults);

Security Management:

- Memory Change Alert (proactively notifies user and the network administrator any time system memory is tampered with);

- Ownership Tags (identifies the owner of a Deskpro in case of loss or theft with a secured text string displayed during system start-up).

Plus, with its new build-to-order manufacturing process, Compaq is able to establish very competitive price points with these new models. Desktop V contract prices are:

Compaq Deskpro 2000:

Model             Operating System     DTV Contract Price(e)

5200X/2100        Microsoft Windows 95           $1,835
                  Monitor sold separately


5200X/2100        Microsoft Windows NT           $2,054
                  Workstation Version 4.0
                  17-inch (15.6-inches viewable)
                  monitor included


5200X/3200/CDS    Microsoft Windows 95           $2,753
                  17-inch (15.6-inches viewable)
                  monitor included

5200X/3200/CDS    Microsoft Windows NT           $2,845
                  Workstation Version 4.0
                  17-inch (15.6-inches viewable)
                  monitor included

6200/2500/CD      Microsoft Windows NT           $2,957
                  Workstation Version 4.0
                  17-inch (15.6-inches viewable)
                  monitor included

"It is a testament to Compaq's quality and value that we were chosen to supply our Deskpro PCs to the Air Force," said Ed Ellett, Director, North American Desktop Marketing, Compaq Computer Corporation. "As with other branches of the U.S. military, the Air Force requires innovative, high- quality technology to support the agency's sophisticated, mission-critical applications. With our new Deskpro models, we continue to deliver on our commitment to meet the needs of all users -- providing the latest technology coupled with the reliability that customers have come to expect from Compaq."

Build-to-Order Products and Compaq's Optimized Delivery Model

Compaq's new build-to-order program, the first phase of the company's Optimized Delivery Model, addresses the federal buyer's need for manageable products which incorporate the most robust features at competitive industry prices. Build-to-order (BTO) is a set of integrated business processes that span the length of the supply chain from suppliers to end customers, resulting in product shipments built to actual customer or channel orders rather than built to forecast. Federal users of BTO products benefit from greater product availability, delivery predictability and significantly lower price points, while they continue to receive Compaq quality, innovation and reliability.

The USAF Desktop V Contract and Hughes

Awarded in May 1996, the USAF Desktop V contract -- a firm, three-year, fixed-price Indefinite Delivery/Indefinite Quantity (IDIQ) contract held by Hughes Data Systems, and valued at $924 million -- provides up to 360,000 computers, peripherals, software, and related service and support for Air Force commands, bases and other worldwide users, including federal and civilian agencies.

Founded in 1990, Hughes Data Systems is a vendor-independent systems integrator and maintains offices throughout the United States and across the globe. A full-service solution provider, Hughes Data Systems offers government agencies a comprehensive line of technology solutions along with quality integration services and 24 hours/7 days a week national and global on-site support.

Compaq in the Federal Government Sector

A major supplier of the industry's most affordable, reliable and feature-rich IT products to the government, Compaq offers portable and desktop PCs, servers and networking products, as well as monitors and other options. Today's announcement is the latest move in Compaq's commitment to address the specific needs of the company's rapidly growing federal business segment. Additional information on Compaq's government programs is available by dialing into Compaq's Web site at http://www.compaq.com .

Company Background

Compaq Computer Corporation, a Fortune 100 company, is the fifth largest computer company in the world and the largest global supplier of personal computers, delivering useful innovation through products that connect people with people and people with information. The company is an industry leader in environmentally friendly programs and business practices. Compaq is strategically organized to meet the current and future needs of its customers, offering Internet and enterprise computing solutions, networking products, commercial PC products and consumer PCs. As the leader in distributed enterprise solutions, Compaq has shipped over a million servers. In 1996, the company reported worldwide sales of $18.1 billion. Compaq products are sold and supported in more than 100 countries through a network of authorized Compaq marketing partners. -0-

(a) Warranty service to be provided by Hughes Data Systems. Certain restrictions and exclusions apply. (b) Provided by Hughes Data Systems on the Deskpro 2000 Model 5200x/2100 under the USAF Desktop V contract. The data transfer rates for 16X MAX Slot load CD-ROM drives may vary. (c) The data transfer rate for Compaq's 16X MAX Slot Load CD-ROM drive is 1,200-2,400 Kbps (8X-16X variable). (d) All commercial Compaq drives offer Prefailure Warranty, which allows the hard drive to be replaced under warranty before failure occurs. (e) All prices shown are Desktop V contract prices only; reseller prices may vary.

Compaq, Registered U.S. Patent and Trademark Office. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies.

CONTACT: Compaq Computer Corporation

Janet Dean, 281-514-0484

[e-mail]

or

Miller/Shandwick Technologies

Bethany Lieberman, 617-536-0470

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