News release

Compaq Broadens Appliance Server Portfolio with Intel NetStructure Products

Compaq Computer Corporation (NYSE: CPQ) today announced plans with Intel^®Corporation to address growing customer demand for complete Internet appliance server solutions. Effective today, Compaq will recommend and sell Intel NetStructure™ XML, SSL, and VPN appliances in addition to its own TaskSmart line of appliance servers. With this agreement, Compaq will immediately expand its appliance portfolio and offer customers a wider range of easily deployable, integrated business solutions.

"As the pioneer of industry standards in the appliance market, Compaq provides customers the undeniable advantages of ownership costs and easily integrated solutions as they rapidly build out their next generation technology infrastructures," said Mary McDowell, Senior Vice President and General Manager, Compaq Industry Standard Server Group. "With the combination of TaskSmart and Intel NetStructure appliances, Compaq immediately offers a complete portfolio of appliance solutions that further enable and simplify the build out of the Internet-connected economy, a key element of Compaq's strategy."

Attacking the $16.7 Billion Appliance Market

According to January 2001 estimates from industry analyst firm IDC, the market for appliance servers is expected to reach $16.7 billion by 2004. Both Compaq and Intel have aggressively pursued this burgeoning market to respond to evolving customer needs. Compaq is at the forefront of addressing the appliance server market with the development of TaskSmart content acceleration and NAS (network attached storage) appliances.

"This new agreement between Compaq and Intel significantly strengthens Compaq's already strong appliance family," said Mark Melenovsky, Research Manager, Global Enterprise Server Solutions Group at IDC. "We believe that this will allow Compaq to provide a complete, end-to-end appliance portfolio to fully address their customers' needs for such Internet-enabled application areas as secure e-commerce."

Collaborating to Drive Industry-Standard Computing

"This announcement is a natural extension of the close relationship between Intel and Compaq and underscores Intel's commitment to help enable cost-effective and highly reliable e-business data center solutions," said John Miner, Vice President and General Manager of Intel's Communications Products group. "We look forward to working with Compaq in the future as we continue to develop and market these solutions to our customers and advance industry-standard computing globally."

The agreement underscores Compaq's overall strategy to drive profitable growth through innovative products and integrated solutions serving the global market. Compaq is committed to making it easier for customers to build and manage their Internet infrastructure through unrivalled partnerships, intelligent manageability, and global services and support.

Building on the close relationship between Compaq and Intel to drive industry-standard computing, today's announcement establishes the foundation for joint product and market development in the future. In the coming months, Compaq will also work with Intel to migrate selected Intel NetStructure appliances to the Compaq TaskSmart brand.

The Intel technologies to be adopted by Compaq include: e-commerce accelerators, which restore speed to servers by offloading the encryption and decryption of Secure Socket Layer (SSL) traffic; XML accelerators, which optimize key business-to-business (B2B) transactions for timely and reliable service; and virtual private networking (VPN) products, which securely and cost-effectively connect employees, customers and e-business networks.

Availability, Pricing, Service and Support

Compaq will offer the following products, which are available immediately through all Compaq sales and distribution channels: Intel^®NetStructure™ VPN Gateway products, Intel NetStructure E-Commerce Accelerator products, and Intel NetStructure XML Traffic Director products. Product pricing starts at $2,550. Initially, service and support will be fulfilled by Intel. For additional information about Compaq appliances, please visit http://www.compaq.com/tasksmart/index.html.