News release

HP and Rational Collaborate to Deliver Open-standard e-Business Solutions for HP Netaction Suite

PALO ALTO, Calif., and LEXINGTON, Mass., May 14, 2001

Hewlett-Packard Company (NYSE:HWP) and Rational Software Inc. (Nasdaq:RATL) today announced an initiative to deliver e-business solutions -- based on open industry standards, such as XML and Java™ -- to enterprise customers by integrating the Rational software suite and the HP Netaction Internet operating environment.

HP and Rational plan to develop solutions that support the entire application development process, including business-process modeling, requirements definition, visual modeling, code generation, configuration management, defect tracking, testing, deployment and systems management.

The first result of this business relationship will be the integration of the Rational Unified Process™ and the HP Bluestone Total-e-server, the application server of the HP Netaction family of products. HP and Rational further plan to optimize the Rational Suite™ and the Rational Unified Process for the HP Netaction family to dramatically simplify the development, integration and deployment of enterprise applications. The HP Netaction family provides a bridge between the Microsoft® .NET platform and the Sun Microsystems Enterprise Java (J2EE) platform by integrating XML standards and technologies.

"We expect our agreement with Rational Software to benefit our multi-platform customers by reducing the time, cost and complexity to develop, integrate and deploy e-business solutions," said Bill Russell, vice president, HP Software Solutions Organization. "We welcome the opportunity to continue our software and solutions development work with Rational."

HP will use and recommend the Rational Unified Process methodology as a best practices framework for customer application development projects and for internal development projects. HP Consulting has adopted the Rational Unified Process as a delivery framework for HP Bluestone customer application development projects.

"HP Consulting's use of the Rational Unified Process will enhance its ability to provide value to customers by providing a best practices framework that offers guidance throughout the entire software development process," said Eric Schurr, senior vice president of marketing for Rational Software. "We will work with HP to create solutions that enable developers to build higher quality enterprise-class e-business solutions that can be deployed rapidly on the HP Bluestone Total-e-server."

"Some of the most successful tools vendors are those who have created business alliances to provide their customers with seamlessly integrated solutions to improve the entire development and deployment process," said Rikki Kirzner, research director, IDC. "The HP and Rational Software alliance is such an example of two companies working together to help their customers simplify the process of creating enterprise and global applications."

About Rational

Rational Software provides a platform for software development that speeds time-to-market while improving software quality. This integrated, full-lifecycle solution combines software engineering best practices, market-leading tools, and professional services. Ninety of the Fortune 100 and 49 of the Fortune e-50 build software with the Rational solution. This open platform is extended by hundreds of partners providing more than 500 complementary products and services. IDC has recognized Rational as the revenue leader in multiple application development and deployment markets for four years in a row. Founded in 1981, Rational, one of the world's largest software companies, had revenues of $815 million in its fiscal year ended March 2001 and employs more than 3,700 people around the world. Rational is a component of the Nasdaq-100 Index®.

About HP

Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services -- is focused on making technology and its benefits accessible to individuals and businesses through simple appliances, useful e-services and solutions for an Internet infrastructure that's always on.

HP had total revenue from continuing operations of $48.8 billion in its 2000 fiscal year. Information about HP and its products can be found on the World Wide Web at http://www.hp.com.

Java is a U.S. trademark of Sun Microsystems, Inc.

Microsoft is a U.S. registered trademark of Microsoft Corp.

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 products, 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 the ability of HP to retain and motivate key employees; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; 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 the annual report on Form 10-K for the year ended Oct. 31, 2000, and subsequently filed reports. HP does not intend to update these forward-looking statements.