HP Expands Collaboration with Cisco Systems for Utility Computing Solutions; More Than 218,000 Licenses Sold for Utility Computing Enabled Solutions.

Business Editors/High-Tech Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--Feb. 19, 2003

HP (NYSE:HPQ) today expanded its collaboration with Cisco Systems on the HP Utility Data Center (HP UDC) to provide enterprise and service provider customers with an HP UDC solution optimized for Cisco networking components.

Specifically, HP and Cisco have agreed to joint engineering development activities and interoperability testing to integrate Cisco components into the HP UDC architecture, helping to ensure feature and benefits optimization for customers. Included in the UDC architecture, interoperating with HP Utility Controller software, are Cisco Catalyst 6500 Series switches, PIX 515 Series firewalls and 2950 routers.

Through their joint efforts, HP and Cisco also will enable new products and features to be incorporated into the HP UDC in an accelerated, tightly integrated fashion.

Expansion of Cisco's support for the HP UDC is the latest in a series of successes in support of HP's adaptive infrastructure initiative, which allows customers to quickly and efficiently adapt their IT infrastructures to changing conditions in the market and customer demand.

"Networking is critical to delivering value in a virtualized environment," said Tom Kucharvy, president, Summit Strategies. "This partnership will benefit both companies and further establish HP's UDC in the market."

The combined strength of the market-leading HP UDC and Cisco Systems' leading networking platforms enables customers to quickly and efficiently optimize their IT infrastructures. The two companies also will collaborate on research and development, joint marketing, sales and cooperative support of the HP UDC.

"We are pleased to partner with HP in bringing a virtualized data center to market that is enhanced specifically to run our components," said Eugene Lee, vice president, Worldwide Enterprise Marketing, Cisco. "The combination of our networking solutions and HP's UDC will be a powerful and compelling offering to our mutual customers."

HP is the only vendor with true utility computing solutions on the market today. With the HP UDC, enterprises can double their data center efficiency (for example, to 60 percent from 30 percent); realize a reduction in total cost of ownership by accessing capacity as they need it, when they need it; and move entire systems into applications and drag-and-drop resources on the fly. Moreover, all system changes are done outside of the computer room; not a single wire or server is touched.

"Today's news demonstrates that HP has the better utility computing partner value proposition over any competitor," said Nick van der Zweep, director of Utility Computing, HP Enterprise Systems Group. "Our milestones serve as proof of the success of our utility computing and adaptive infrastructure strategy to provide customers with an agile IT infrastructure that is right for their businesses and that delivers true return on IT investment."

Additionally, HP has sold more than 218,000 licenses of key technologies enabling customers to more effectively run and adapt their infrastructures according to their particular business requirements.

This includes more than 10,000 on-demand server licenses delivering true usage-based utility computing. The extended virtualization capabilities of HP Workload Manager software have improved the integration of clustering, partitioning, workload management and pay-as-you-go offerings, allowing customers to utilize utility computing capabilities. HP customers have already purchased more than 70,000 licenses for HP Serviceguard clustering and more than 65,000 licenses for HP workload management software.

HP also announced further milestones and successes for its utility computing and adaptive infrastructure initiatives:

-- More than 90 percent of HP Superdome servers ship with HP Serviceguard and HP Workload Management tools.

-- HP has added new Cell board instant Capacity On Demand to its existing suite of Capacity on Demand offerings, including instant Capacity On Demand (iCOD), Temporary instant Capacity On Demand and Pay-Per-Use.

-- Customers have made HP iCOD their solution of choice over competitive offerings, resulting in 40 percent of HP Superdome servers shipping with HP iCOD capabilities.

-- The adoption rate has increased 200 percent for the HP Temporary instant Capacity On Demand solution quarter over quarter.

-- HP OpenView software, which delivers the adaptive management platform for utility computing, has sold 135,000 licenses.

-- HP has shipped 15,000 HP ProLiant blade servers and has sold 50,000 ProLiant Essentials Rapid Deployment Pack licenses.

-- HP has shipped more than 8,000 storage virtualization products, including HP StorageWorks Enterprise Virtual Array, Continuous Access Storage Appliance and Virtual Array systems.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its acquisition of Compaq Computer Corporation on May 3, 2002. More information about HP is available at http://www.hp.com.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include employee management issues; the timely development, production and acceptance of services and their feature sets; the challenge of managing asset levels, including inventory; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's annual report on Form 10-K for the year ended October 31, 2002, as filed with the Securities and Exchange Commission on January 21, 2003, and subsequently filed reports. 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 to update these forward-looking statements.