News release

HP and Telefónica to Promote Innovative Services for Service Providers

Alliance Addresses Recent Increase in Customer Demand for Safeguarding Data

PALO ALTO, Calif., and MIAMI, Nov. 13, 2001

Hewlett-Packard Company (NYSE:HWP) and Telefónica Data, a subsidiary of Telefónica S.A. (NYSE:TEF), today announced that they will jointly market and promote Telefónica Managed Infrastructure Data Services solutions, which are supported by HP OpenView enterprise management solutions, HP storage and HP hardware platforms. In response to unprecedented customer demand for safeguarding data, the two companies will promote data recovery, shared storage and managed services through Telefónica Data's KeyCenter, located in Miami.

"HP is deeply committed to working with service providers to develop value-added solutions for our mutual customers, and our program for service providers is the standard bearer for innovation in the industry," said Airton Gimenes, vice president of sales, HP Business Customer Organization. "Our alliance with Telefónica is intended to extend these services and solutions even further."

Under the terms of the agreement between the two companies, Telefónica will join the HP Service Provider Program as an elite member. The program generates awareness and drives demand for joint HP and service provider solutions. Its features include co-selling, incentive programs, co-marketing programs, joint solutions development and a comprehensive infrastructure, applications and operations qualification program.

"Our unique data center facilities and global network combined with HP's technology and market reach make an outstanding combination," said William Dyer, chief executive officer, Telefónica Data USA. "This alliance allows both HP and Telefónica to expand the depth and breadth of what we bring to customers. When customers win, everybody wins." SPSS, a leading provider of analytical solutions based in Chicago, has chosen Telefónica to provide a full-suite of managed services for its ASP delivery model based on an HP infrastructure. These services will run on HP Windows®-class servers and HP XP 512 shared storage solutions in Telefonica's KeyCenter.

"By hosting our market research ASP with Telefónica Data and running it on HP servers, we are able to reach customers all over the world with a minimal investment in infrastructure," said Tom Maxfield, vice president, information technologies and services, SPSS. "Telefónica Data's global network, combined with HP's highly reliable servers and support, allows us to focus on the benefits of our application and leave the IT infrastructure to the experts."

Through the use of HP OpenView enterprise management solutions, Telefónica can provide proactive management of a customer's entire network along with configuration and critical monitoring of servers, operating systems, applications and databases. This combination of end-to-end service level management, data centers and networking offers the customers the security and simplicity of using a single provider across multiple countries.

Telefónica also will offer competitive data replication and shared or dedicated storage services to customers looking for flexible and secure solutions that help preserve data, even in the event of catastrophes. This solution will combine the HP Surestore Disk Array XP512 with Telefonica's KeyCenter hosting infrastructure. The KeyCenter is directly connected to Telefónica Data's Global IP Network, which has over 500 points of presence, as well as Telefonica's expansive 16,000-foot undersea cable network.

Finally, Telefónica will offer a developer's platform to allow systems integrators to remotely access and work with their company's important business data. The developer's platform leverages the HP Netaction software suite, HP UNIX® and Windows platforms and Telefonica's state-of-the-art global broadband network. The platform will provide developers secure, remote access to the tools and infrastructure that allow them to test their mobile, broadband and enterprise applications in a hosted environment. It also will serve as a channel to drive business into Telefonica's KeyCenter.

About Telefonica

Telefónica S.A. is the world's leading communications operator in Spanish and Portuguese-speaking countries, where it has a potential market of over 550 million people and more than 60 million customers. With over 148,000 employees worldwide and revenues of US$26 billion, it is one of the world's largest providers of communications services. Telefónica offers services in 48 countries, with subsidiaries in Latin America, Europe, the United States, Africa and Asia.

Telefónica Data, a subsidiary of Telefónica S.A., is a leading supplier of global corporate telecommunications and managed hosting services. Telefónica Data is currently in the process of rapid international expansion, developing businesses in the United States, Argentina, Brazil, Chile, Colombia, Uruguay, Peru, Mexico, Puerto Rico and other Latin American markets. Telefónica Data is the communications leader in Spain, with additional operations in Austria, Italy and Germany. Telefónica Data USA is headquartered in Miami, with additional operations and regional sales offices in New York, Chicago and Houston. Please visit at www.us.telefonica-data.com for more details.

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 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.

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

UNIX is a registered trademark of the Open Group.

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 employee management issues; 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 assumes no obligation and does not intend to update these forward-looking statements.