News release

Innovative Solution from UGS and HP Significantly Lowers Entry Costs for Collaboration in Product Development

Joint Effort Yields Bundled Collaboration Offering that Speeds Implementation and Integration

CYPRESS, CA and PALO ALTO, CA., July 17, 2001

UGS (NYSE: UGS), a leading supplier of product lifecycle management solutions, and Hewlett-Packard Company (NYSE: HWP) today announced a solution offering of software, hardware and services for the rapid deployment of enterprise collaboration applications in product development. The offering - which was co-developed by HP and UGS and will be co-marketed by the two companies - supplies product development and manufacturing companies with pre-packaged collaboration software bundled with proven hardware and implementation services. The solution can significantly reduce the time it takes to deploy collaboration technologies and to integrate them with a company's enterprise infrastructure and other vital business systems. The solution is pre-qualified and developed for quick installation and smooth integration into existing infrastructures.

The solution is immediately available and is based on UGS' industry-leading e-Vis collaboration backbone combined with HP's enterprise hardware tools, which include UNIX servers, NT servers, UNIX workstations and a broad range of HP network and platform connectivity solutions. The introduction of the solution marks the beginning of a comprehensive suite of technology solutions for collaborative commerce, to be offered by UGS. These solutions leverage the collective best practices developed by UGS and HP and will help enable organizations to rapidly deploy collaboration solutions for a wide range of industry segments and business specific problems such as supplier integration, design reviews and digital mockup, product serviceability, and enterprise project collaboration and visualization.

As noted in a June 2000 study of the automotive industry, conducted by Dresdner Kleinwort Wasserstein, Inc. (formerly Wasserstein Perella Securities, Inc.), the big three automotive manufacturers alone stand to save almost $19 billion in vehicle development costs by successfully implementing collaborative product development technology. The UGS and HP solution can help manufacturers realize these benefits at an accelerated pace by providing a web-based collaboration platform, built on industry standards, that enables partners to be included in core design processes. In addition, it can be implemented much faster than the traditional method of assembling technologies together in an ad hoc fashion.

The UGS and HP solution comprises:

• Pre-packaged software, built on UGS' industry-leading e-Vis collaboration backbone.

• A hardware and operating system environment provided by HP and UGS that reduces deployment and implementation times from months to weeks because it is pre-qualified.

• Bundled services built on HP's "workshop" approach of proven consulting discovery methodologies, based on the evaluation of a customer's work process and how that process can be modified to become more effective.

Today's announcement is an extension of the technology and marketing relationship between HP and UGS' Engineering Animation Inc. (EAI) division, a company acquired by UGS in October 2000.

"HP and UGS have a longstanding relationship which has generated significant value, particularly for automotive industry customers , as well as customers across multiple industries," says Ulrich van der Meer, general manager of HP's Extended Manufacturing Business Unit. "UGS is a valued member of our customer solutions program and the offering announced today demonstrates our joint commitment to helping our customers reach the next generation of productivity gains in mechanical design and other important markets."

"e-Vis technology has enabled Spicer Driveshaft to conduct global design reviews using off the shelf web-based tools," says Jeff Dutkiewicz of Spicer Driveshaft, Inc. a wholly owned subsidiary of Dana Corporation. "The reliability and security provided by HP enables us to collaborate with confidence."

About Hewlett Packard

Hewlett-Packard Company - a leading global provider of computing and imaging solutions and services - is focused on making technology and its benefits accessible to all. 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.

About UGS

UGS (NYSE: UGS) is one of the world's fastest growing and most successful software and services companies, dedicated to helping manufacturers optimize their product lifecycle process. UGS' rich heritage and financial strength have been established by consistently providing the industry's best product development applications for over 25 years. Today, UGS is distinguished as the leading supplier of Internet-based product life cycle collaboration solutions as well as the company that is creating the de facto industry standards for the digital product. With offices in over 30 countries around the globe, UGS is the vendor of choice for open solutions that seamlessly weave into any environment and create unprecedented value for the world's most demanding customers. In addition, UGS is the first company in its industry to earn the ISO 9001/TickIT certification. For more information please contact UGS at (800) 498-5351 or via the World Wide Web at http://www.ugs.com.

UGS, Unigraphics Solutions, Parasolid, Solid Edge, Unigraphics, Product Vision, i-MAN, GRIP, managedServices, EAI, Factory CAD, Factory Flow, Sense8, VisFactory, VisConcept, VisConference, VisMockup, VisProducts, VisVSA, VSA, e-Vis, LightningStart and RAPIDiMAN are trademarks, registered trademarks or service marks of Unigraphics Solutions, Inc. All other trademarks, registered trademarks or service marks belong to their respective holders. The information within is subject to change without notice and does not represent a commitment on the part of UGS.