Compaq's Workstation Launch Reinforces Leadership in Windows NT Distributed Environments.

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 29, 1996--

Compaq Poised to Capture New Markets and

Reduce the Total Cost of Ownership for Workstations

Editors' Summary

-- Compaq introduced the first five models of the Compaq Professional Workstation, offering uncompromising performance at prices up to 75 percent less than traditional RISC/UNIX workstations (a).

-- Compaq demonstrated how its new Compaq Professional Workstation is the right workstation from the right company at the right time.

-- The company reiterated its goal to become one of the top three computer companies by the year 2000.

Standing virtually at the doorsteps of rivals that offer traditional proprietary workstations, executives of Compaq Computer Corporation (NYSE: CPQ), the fifth largest computer company in the world and the leading supplier of commercial desktops and servers, today launched the Compaq Professional Workstation family - their own high-performance entry into the fast-growing NT/X86 (b) workstation market. Compared to other workstation offerings, the Compaq Professional Workstation will appeal to professional customers seeking high performance with low total cost of ownership, the widest variety of applications, and the backing of the industry leader, Compaq.

The Right Time

"This is a great day for workstation customers," declared John T. Rose, Senior Vice President and General Manager of Compaq's Enterprise Computing Group, the parent organization for Compaq's Workstation Division. "With leading industry analysts projecting that customers are going to drive the NT/X86 workstation market to grow more than 40 percent each year through the year 2000 (c), this is the right time to introduce new products to meet demanding workstation customer needs," said Rose, speaking at a press conference here today.

"The timing is right, because there is a critical mass of customers looking for open industry-standard products that deliver great performance, technology choices, and lower total costs of ownership. The timing is right, because there is a critical mass of industry-standard components like Intel Pentium Pro microprocessors that enable us to offer outstanding performance at a price that's second-to-none. The timing is right, because the Microsoft Windows NT tidal wave that has benefited both the server and the desktop is now available for workstations. The timing is right, because of the critical mass of traditional RISC/UNIX application vendors moving aggressively to Windows NT and creating a wide range of choices," Rose said.

The Right Company

Rose also outlined why Compaq is the right company to help drive the workstation market forward.

"The foundation of Compaq's approach to workplace computing is our commitment to open systems and broadly accepted industry standards," Rose said. "Our customers rightfully demand that their business processes drive technology -- and not the other way around," he said, alluding to the high costs with limited choice and flexibility associated with traditional RISC/UNIX workstation solutions.

"Our business model dovetails so well with the needs of the marketplace," Rose explained. "Today's customers want open, industry-standard systems that perform at the level of proprietary RISC/UNIX systems, but that deliver more value, flexibility and adaptability to changing business cycles. The business model of the proprietary RISC/UNIX systems providers has traditionally been a high-margin, yet high-cost business. But Compaq is a different breed of systems company. We start with a highly efficient cost structure, invest our engineering prowess in broadly accepted standards like Windows NT, Pentium Pro and PCI (d), then bring the best ingredients from the best partners into powerful platforms that are seamlessly integrated with the application and network for confident deployment throughout the customer's organization," Rose noted.

"The customers have driven the powerful new momentum toward real open systems by demanding non-proprietary, cost-effective and available solutions," Rose observed. "Of course, this had been envisioned and promised years ago with the advent of RISC and UNIX, but the promise was forgotten over time as unique RISC architectures and vendor-specific UNIX implementations dominated the landscape. Microsoft Windows NT and the Intel Pentium Pro are being embraced as the standard operating system and microprocessor of choice because of their abundant benefits. These benefits include: outstanding performance and scalability at a great price; robust, secure environments for demanding applications; widespread application availability and portability; and a broad array of choices," Rose concluded.

"At the same time, workstation customers have come to expect a certain level of performance, a certain level of integration, and a certain level of hand-holding from workstation vendors," Rose said. "Compaq meets those customers' expectations, but with a different, more cost-effective business model that leverages our partners' strengths to deliver the required performance, integration and support."

The Right Product

Compaq makes the case that the Compaq Professional Workstation is, in fact, the right product from the right company at the right time.

Based on industry-standard Intel Pentium Pro microprocessors and the industry-standard Microsoft Windows NT operating system, Compaq Professional Workstations offer uncompromising performance at prices up to 75 percent less (e) than workstations based on RISC microprocessor technologies and the UNIX operating system. The Compaq Professional Workstation also stands apart from other Pentium Pro/NT-based workstations with easier setup and installation, better management capability, and broad support from leading hardware and software partners. The result is a high-performance, low-cost, well-supported, easily managed workstation that integrates seamlessly into any workstation environment and runs the demanding workstation applications previously available only on RISC/UNIX platforms. Because it is based on industry-standard technologies, the Compaq Professional Workstation may also eliminate the need for end-user professionals to have a second personal computer for general business purposes. The combined effect is the opportunity for a dramatic reduction in total cost of ownership for workstation customers.

The Compaq Professional Workstation is initially targeted at three key market segments: mechanical computer-aided design (MCAD) in collaboration with Autodesk, Structural Dynamic Resources Corporation (SDRC), Parametrics Technology (PTC), EDS/Unigraphics and Bentley; interactive content and software development in collaboration with Kinetix, SoftImage and Adobe; and financial information and analysis in collaboration with Dow Jones Telerate, Reuters and RICH.

The five Compaq Professional Workstation models introduced today feature Microsoft Windows NT Workstation 4.0, either one or two 200MHz Intel Pentium Pro microprocessors, integrated NetFlex-3 autosensing (10Mbit/s and100Mbit/s) network interface cards (NICs), up to 512 megabytes of memory, 8X CD-ROM drives, up to 4 gigabytes of hard-drive storage, Wide-Ultra SCSI controllers, and high- performance graphics controllers designed for workstations (Matrox Millennium or ELSA Gloria L). Future Compaq Professional Workstations will take advantage of high-performance graphics products from Intergraph Computer Systems and Integrated Computing Engines (ICE).

All models also include Compaq's SmartStart installation and configuration utility and a comprehensive set of software management tools designed to help simplify and lower the cost of installation, ownership and management.

Compaq Professional Workstations models will be available in November from a broad network of authorized marketing partners at prices ranging from $4,300 to $10,200 (f).

Compaq Reiterates Enterprise Computing Strategy

Compaq has established a goal to become one of the top three global computer companies by the year 2000. For Compaq customers, this means that -- to a greater degree each day -- Compaq and its key partners deliver the entire range of products and services to connect people with people and people with information. Enhancing people's access to people and information is the driving philosophy behind Compaq's goal. It is a goal that Compaq can reach by developing and partnering to continue to deliver the best-of-breed products and services.

"For the Enterprise Computing business, Compaq has created distinct organizations, each with a clear focus on developing new and better products and services for our customers," noted Rose. "The Server Products, Enterprise Options and Enterprise Solutions Divisions are focused on delivering the best possible hardware platforms, external storage and manageability. The Workstation and Network Products Divisions are focused on bringing greater value and performance to their respective markets. The Internet Products Division is focused on delivering Internet solutions, services and products that allow Compaq customers to take the greatest advantage of the open Internet and intranet technologies. All these groups have a common mission -- to partner with the best-in-the-industry companies to deliver enterprise computing solutions that enhance ease-of-use and reduce the total cost of ownership for customers," Rose concluded.

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 approximately 1 million servers. In 1995, the company reported worldwide sales of $14.8 billion. Compaq products are sold and supported in more than 100 countries through a network of authorized Compaq marketing partners. Customer support and information about Compaq and its products can be found at http://www.compaq.com or by calling 1-800-OK-COMPAQ. Product information and reseller locations can be obtained by calling 1-800-345-1518. -0-

(a) Based on SPECint95 and Bench95 benchmarks of Compaq Professional Workstation ($6,700 and $13,200 respectively) run by Compaq; SPECint95 benchmark of SUN Ultra 2 Series 1200 ($29,999) published in the SPEC newsletter; SPECint95 benchmark of HP B160L ($19,995) posted on HP's website; and Bench95 benchmark of SGI Indigo 2 ($30,895) listed in Pro/E: The Magazine March/April 96 issue. See Compaq workstation product press release for details of configurations and benchmark results. (b) In this context, "NT/X86" refers to Microsoft Windows NT and Intel Pentium or Pentium Pro microprocessors. It is contrasted with traditional proprietary workstations based on the UNIX operating system and RISC microprocessors. (c) IDC estimates (d) Peripheral Component Interconnect, a standard high speed bus architecture. (e) See footnote a. (f) All prices herein are estimated selling prices. Actual dealer 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

John Sweney, 713-514-0484

[e-mail]

or

Miller/Shandwick Technologies

Eric Grodziski, 617-536-0470

[e-mail]