Compaq First to Ship Net PC Solution; Deskpro 4000N Now Available Worldwide; Superior Manageability Features for Controlled Computing Environments.

HOUSTON--(BUSINESS WIRE)--Sept. 22, 1997--Bolstering its industry leadership in PC manageability, Compaq Computer Corporation (NYSE:CPQ), the world's leading supplier of PCs(a), today announced the immediate availability worldwide of the Compaq Deskpro 4000N -- the industry's first Net PC to ship. The Compaq Deskpro 4000N is designed to deliver significantly lower ownership costs for structured, controlled computing environments. Standard with Compaq's Intelligent Manageability, the Compaq Deskpro 4000N continues the Company's tradition of incorporating world-class management tools that lower the total cost of ownership, particularly in networked environments.

This announcement also extends Compaq's role as an industry leader in standards-based management solutions, as exemplified by several initiatives. In 1995, Compaq launched Intelligent Manageability, providing AssetControl, designed to efficiently inventory and monitor PC hardware and software assets; Fault Management, designed to minimize user downtime; and Security Management, designed to protect critical data from unauthorized access. At that time, Compaq also announced the Management Solution Partners Program, which ensures that Intelligent Manageability features are supported by a broad range of PC LAN and enterprise management solutions. The Company also pioneered the SMART hard drive technology, which enables proactive backup and automatic data protection before a hard disk failure occurs. In addition, Compaq co-authored the Net PC and Desktop Management Interface (DMI) specifications, is an active member in the Desktop Management Task Force (DMTF) and continues to enhance its Intelligent Manageability capabilities and Management Solutions Partners Program.

"The Deskpro 4000N is a continuation of Compaq's commitment to provide superior manageability features which will effectively lower the total cost of owning and maintaining PCs in a commercial environment," said Mike Winkler, Senior Vice President and Group General Manager, Compaq PC Products Group. "We will soon take this one step further with the incorporation of Net PC technologies across the entire Deskpro line."

The Deskpro 4000N is ideally suited for environments requiring centralized management, but that do not require the flexibility and expandability associated with traditional desktop PCs. These environments could include banks, hospitals, airlines, customer support centers, and insurance companies where the user's primary application is task-specific, such as data entry, data lookup and reservations.

"Compaq's shipment of their Net PC takes a big step toward delivering advanced manageability to corporate business computing," said Pat Gelsinger, Vice President and General Manager, Desktop Products Group, Intel Corporation. "Compaq and Intel have worked closely together to ensure that the Compaq Deskpro 4000N and Wired for Management-enabled Managed PCs will provide effective centralized management to help control costs across all networks."

"With this Net PC announcement, Compaq continues its commitment to delivering innovative desktop solutions for business customers", said Jim Allchin, Senior Vice President, Personal Business Systems Group, Microsoft Corporation. "The Compaq Deskpro 4000N running Windows NT Workstation 4.0, a highly reliable and secure operating system, allows customers to reduce their total cost of ownership while maintaining compatibility with existing Windows applications. In addition, the Compaq Deskpro 4000N, when combined with Microsoft's Zero Administration Kit, provides an ideal solution for lowering costs in structured computing environments."

To allow corporations to easily maintain consistent PC configurations while controlling data integrity, no removable media devices -- such as CD-ROM drives and diskette drives -- are supported on the Deskpro 4000N. ISA slots have also been eliminated to ensure Plug and Play functionality and to simplify the configuration and management of add-in cards. To simplify integration of Deskpro 4000N in enterprise network environments, the new desktop also supports Net PC-standard remote boot and associated Remote System Installation and configuration capabilities. Additionally, the customer-lockable, sealable case design allows systems administrators to limit the end user's access to the Deskpro 4000N's internal components. This fixed function design effectively controls expandability to ensure hardware and software consistency.

In accordance with the Net PC specifications, the Deskpro 4000N is powered by a 166MHz, 200MHz or 233MHz Intel Pentium processor with MMX technology and includes 32 MB of SDRAM, an internal EIDE hard drive, integrated 10/100 Mb/s auto-sensing Netelligent Interface Controller with Remote Wakeup technology, a PCI slot, two USB ports, two serial ports, and a parallel port. In addition to Intelligent Manageability features, the Deskpro 4000N is fully DMI-compliant, and provides support for a range of industry-leading management applications including Microsoft SMS, Novell ManageWise, Intel LANDesk Management Suite, McAfee Zero Administration Client, and Computer Associates UniCenter. The Deskpro 4000N will ship with Microsoft Windows NT 4.0 preinstalled, and will support Windows 3.1, Windows 95, Windows NT 3.51 and IBM OS/2. Prices for the Deskpro 4000N start at $1,149(b).

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. 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.

(a) According to International Data Corporation (IDC), during Q297 Compaq ranked #1 in worldwide total PC sales with an 11.4 percent marketshare, #1 in U.S. total PC sales with a 13.3 percent marketshare, and #1 in U.S. total desktops with a 13.3 percent marketshare.

(b) Estimated street price. 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

Hedy Baker

281/514-0484

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Miller/Shandwick Technologies

Kerry Kelly

617/351-4115

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