HP Delivers New Virtualization Offerings from Desktop to Data Center.

Business Editors/High-Tech Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--Dec. 4, 2003

HP customers Volkswagen Credit and U.S. Steel realize cost savings and

agility benefits of HP Adaptive Enterprise solutions

HP (NYSE:HPQ) today expanded its portfolio of virtualization offerings with new technologies and services. HP's holistic approach to virtualization creates an environment where information technology (IT) resources are pooled and shared so utilization is optimized and supply automatically meets demand.

The offerings build on the HP Adaptive Enterprise strategy to synchronize business and IT to capitalize on change. Virtualization enables customers to simultaneously drive down IT costs while increasing business agility, that is, their ability to respond rapidly to changes in market conditions or customer demands. Customers Volkswagen Credit and U.S. Steel, for example, are already recognizing the benefits of using HP's virtual desktop solution.

HP's new virtualization offerings include a solution that bridges the gap between traditional desktop computing and server-based computing models, giving customers the ability to virtualize their corporate desktop systems. The HP Consolidated Client Infrastructure solution is significantly easier to maintain and delivers a much lower total cost of ownership than traditional PCs - with an average cost saving of $1,200 per user per year, and up to 50 percent total savings over a four-year lifecycle.

To deliver greater business value to enterprises, HP is increasing its focus on virtualization technologies, services and partnerships, including work with BEA Systems and Oracle. HP is enabling companies to dynamically grow and shrink server resources to meet service-level objectives by optimizing its Virtual Server Environment solution for BEA WebLogic Server 8.1 and Oracle9i Database.

(More detailed information on HP's virtualization offerings is available at www.hp.com/go/virtualization/presskit).

According to a recent report by Gartner, by 2008, enterprises that do not leverage virtualization technologies will spend 25 percent more annually for hardware, software, labor and space for Intel(R) servers and 15 percent more on the same for RISC servers (0.7 probability).(1)

"For years, customers have operated with siloed infrastructures that are over-provisioned, inflexible and expensive," said Nora Denzel, senior vice president, HP Adaptive Enterprise. "As demand increases for virtualization solutions, we expect data center utilization rates to double and the market for virtualization software to reach $3 billion by 2006."

In November, HP built on its Adaptive Enterprise strategy with new management services and software products to help chief information officers run IT as a business and automate the dynamic link between business and IT. HP's holistic approach to virtualization complements its management offerings with people, processes and technologies.

HP has extended its IT consolidation solution with powerful virtualization offerings and brings its experience and services capabilities to help customers realize the business benefits of virtualization. To date, HP has shipped more than 250,000 virtualization software licenses.

"Enterprises should start now to build a multiyear strategy for virtualization," said Tom Bittman, vice president, Gartner. "Furthermore, they should understand the virtualization offerings and strategies of their IT vendors and make that a part of their overall IT selection process."

HP Services can guide customers through a phased approach to assessing and optimizing their entire business and IT environment to determine which processes are the best targets for virtualization, and then implement the solutions and provide support as needed. HP Services offers a range of management options for customers, from complete utility offerings to outsourcing solutions, providing customers flexibility with the right measure of guidance from HP.

HP's virtualization offerings

HP's virtualization solutions encompass three key areas representing increasing business value and strategic importance to an organization: element virtualization, integrated virtualization and complete IT utility solutions.

New and enhanced element virtualization solutions unveiled today include:

-- A broadening of HP's Pay per use (PPU) offerings for

servers and imaging and printing. PPU now enables billing

based on usage of imaging and printing products,

consumables and services, continuous consumable supply and

improved printer management that can help reduce costs.

Also, the PPU metering acquisition model has been expanded

to the HP Integrity Superdome, rx8620 and rx7620 servers.

-- The family of HP Serviceguard high-availability clustering

software adds several new offerings: Serviceguard for

Linux for Integrity servers, Serviceguard Extension for

SAP for Linux, Serviceguard Extension for Faster Failover,

HP Enterprise Cluster Master Toolkit and HP Metrocluster

with Continuous Access to HP StorageWorks Enterprise

Virtual Array systems.

-- HP-UX Workload Manager, the intelligent policy engine of

the HP Virtual Server Environment that allows resources to

dynamically move to meet service-level agreements, now

provides automatic and dynamic movement of Instant

Capacity on Demand licenses between nPars, or hard

partitions. The software also has an enhanced user

interface and is more tightly integrated with HP

Serviceguard.

HP's integrated virtualization solutions bring together multiple IT elements, such as servers and storage devices, to help meet service-level objectives:

-- The HP Consolidated Client Infrastructure solution

replaces a traditional desktop PC and its hard drive with

an access device that establishes a one-to-one connection

with HP's new blade PC and networked storage in the data

center that is allocated to the end user upon login. The

solution will be available initially in the Americas.

-- New HP Virtual Server Environment Quick Start solution

significantly reduces the time to production of BEA 

WebLogic Server 8.1 and Oracle9i Database in a virtualized

environment.

-- Enhanced HP Serviceguard extensions for Oracle9i Real

Application Clusters allows the virtualization of

applications, database, servers and storage between two

data centers up to 100 kilometers apart. The data resides,

and is accessed, at both locations simultaneously

resulting in easier manageability and delivering a

disaster-tolerant solution featuring a self-adapting

environment with continuous application availability.

-- New Instant Capacity on Demand for HP ProLiant BL servers

provides ready-to-run industry-standard HP ProLiant blade

servers that can be activated as needed by the customer.

As customers utilize a blade, they are automatically

invoiced for that blade and a percentage of the

infrastructure for maximum cost-efficiency. The solution

will be available initially in the Americas.

"HP's virtual desktop solution gives us a standardized and simplified means to enable enterprise-wide management of the desktop experience," said Jack Klosterman, chief information officer, Volkswagen Credit. "The solution dramatically increases productivity and reduces individual desktop support while allowing us to have the flexibility to make system-wide upgrades or fixes overnight."

HP's complete IT utility solutions optimize heterogeneous resources. For example, HP is the only company to offer a complete, shipping data center virtualization solution, the HP Utility Data Center. New solutions include:

-- Tiered Messaging on Demand, part of the HP On Demand

Solutions portfolio, extends cost-effective managed

messaging to all workers in the form of four service

tiers, each at a price per mailbox, allowing customers to

increase and decrease usage as business needs require.

-- Automated Service Usage allows consumption-based billing

and reporting, automating the functions of collecting,

reporting and billing for the use of IT services. Business

processes can now be tightly linked to the IT

infrastructure through portal-based IT service

provisioning and the dynamic allocation of resources to

help companies ultimately realize self-managed,

self-healing infrastructures.

As a critical enabler of HP's Adaptive Enterprise vision, HP Services helps make solutions real for customers. HP provides technology and related support services, as well as consulting and integration services for optimization and improved efficiencies. HP also is providing new process and technology innovations as part of its On Demand managed services portfolio for added financial flexibility, as well as strategic outsourcing for those customers looking for virtualization solutions that offer maximum IT and financial agility.

Complete information on HP's virtualization offerings is available in an online press kit at www.hp.com/go/virtualization/presskit.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. For the fiscal year ending on Oct. 31, 2003, HP revenue totaled $73.1 billion. More information about HP is available at www.hp.com.

(1) Gartner: "Predicts 2004: Server Virtualization Evolves Rapidly" by Tom Bittman, Nov. 14, 2003.

Intel is a registered trademark of Intel Corp. or its subsidiaries in the United States and other countries. Oracle is a registered trademark of Oracle Corporation and/or its affiliates.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development and performance of these products and services may not proceed as planned; and other risks that are described from time to time in HP's Quarterly Report on Form 10-Q for the period ended July 31, 2003 and HP's other Securities and Exchange Commission reports filed after HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2002. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation and does not intend to update these forward-looking statements.

(C) 2003 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.