News release

Compaq Honors 500 Fastest Growing Companies in America During Annual Inc. Magazine Conference

Compaq Computer Corporation (NYSE: CPQ) and Inc. magazine today announced that Compaq would join UPS and CDW as corporate sponsors of the 19th Annual Inc. 500 Conference and Awards Ceremony honoring the 500 fastest growing companies in America. The event begins today in Louisville, Kentucky, ranked 16th in the December issue of Inc. magazine as an entrepreneurial hot spot, ahead of New York, Seattle, Boston and San Francisco.

"We are proud to have Compaq join us for the seventh year as a corporate sponsor of the Inc. 500 Conference and Awards Ceremony," said Lee Jones, publisher of Inc. magazine. "Compaq's commitment to this fast-growing market segment recognizes the energy and vitality of the people who are being honored at this event—and the dynamic enthusiasm of the Inc. reader."

As exclusive technology sponsor, Compaq will promote its new line of Evo™ notebooks, industry-leading ProLiant™ servers, microportable projectors and the iPAQ™ Pocket PCs during the three-day conference. These products can help small and medium-sized businesses (SMBs) compete and grow quickly in the New Economy. According to the March 2001 IDC report, IDC Predictions 2001: Big Picture and Small Business, small businesses are growing and using the Internet more frequently to conduct electronic commerce and customer outreach. To address this market opportunity, Compaq announced the formation of a Global SMB organization to make it easier for small businesses to purchase, deploy, manage, and harness the power of the Internet, and introduced its first sub-$1,000 ProLiant server.

"During this conference we will demonstrate how Compaq is able to harness its diverse technology strengths and economies of scale to expand the breadth of solutions and services aggressively priced and ideally suited to SMB customers," said Robyn West, vice president of Small and Medium Business in North America. "Compaq is the single source from which a growing business can get the full power of an IT department without the overhead."

Additionally, Compaq is the only manufacturer in a recent Technology Business Research (TBR) study to exhibit positive growth in customer satisfaction ratings for both first quarter 2001 and fourth quarter 2000 in the server market with its market-leading ProLiant servers. The study notes that, "A striking aspect of this quarter's analysis is the great distance at which Compaq has exceeded the competition for parts availability, scalability, server management, and overall hardware reliability" and in the consistency of its customers' satisfaction from quarter to quarter "while its competitors continue to show vulnerability to eroding customer satisfaction for the second consecutive quarter."

This study also noted that Compaq showed a marked improvement in satisfaction with replacement parts availability and has comparable satisfaction ratings with its nearest competitor for on-time reliable delivery. "Customers of all sizes are the number one priority at Compaq, and their needs and preferences are linked to every part of our business—from product design and delivery to service and support," said West.

Compaq also scores very high—and ahead of all the competition—on hardware reliability, its traditional strength, illustrating Compaq's focus on customers' most important priority and its ability to improve in other areas without detracting from its core strength.

"Stability distinguishes Compaq from the competition and represents a continuation of a pattern determined in previous quarters," said Julie Perron, manager of Primary Research, TBR. "We are seeing remarkable consistency on the part of Compaq customer satisfaction from one quarter to the next, indicating an extremely loyal customer base which places high emphasis on reliability."