News release

Partnering is Paying Off for Small and Medium Businesses – and for Compaq

A combination of new initiatives with partners and through direct and agent programs is driving significant new small and medium-size business (SMB) sales for Compaq (NYSE: CPQ) and its partners.

"It's an exciting opportunity for us to unite behind the challenge of gaining share in the fastest growing North America technology market segments," said Jim Milton, senior vice president and general manager of Compaq North American operations. "And, it enables us to make the best use of our channel partners and direct assets to deliver superior value to our customers. Our challenge is to drive radical simplification, eliminate redundant processes and make it easy to do business with Compaq, and these are principles we are applying to our SMB market focus in North America."

Compaq's North America SMB strategy targets companies with one-to-1000 employees. Phoenix Health Care Management Services, Inc., an Atlanta-based healthcare concern, uses Compaq products throughout its 250-employee organization, including desktops, portables and a new ProLiant ML370 server that it purchased through Compaq's 'Business Tuesday' weekly SMB promotion. "Compaq is our preferred technology provider," said Zann Moon, operations coordinator, Phoenix Health Care Management Services, Inc. "Their products are very reliable and greatly enhance our productivity."

Solution Partners and Resellers

With more than 7.3 million SMB companies in the United States, Compaq is building an SMB strategy that—together with its partners—is helping to meet SMB market technology needs. Compaq recently launched an innovative program that features special promotional offers that can be customized by resellers and communicated through a series of unique marketing communication deliverables produced by Compaq. The purpose of the program is to promote the relationship Compaq has with resellers and to promote the fact that customers have a choice in how they can purchase Compaq products: either from one of its SMB Partners or from Compaq.

According to Mike Shuber, IT director for Chicago-based Parson Group, named Inc. magazine's fastest growing private company in 2000, "We purchase Compaq hardware and CarePaq warranty enhancements from our direct-solutions provider, CDW. Compaq is flexible to work with, we have great relationships with CDW as well as Compaq."

Agent & Referral Programs

Through the agent referral program, Compaq rewards Referral Partners for influencing end customers to purchase Compaq commercial products, services and solutions from Compaq or its partners. Referral Program participants earn competitive commissions, based on the customer's purchase price. The Compaq referral program helps extend brand reach by having organizations—such as the National Black Chamber of Commerce and Latin Business Association—serve as agents who receive competitive commissions for recommending Compaq products and services to its members. To date, these organizations and others enrolled in the referral program have influenced millions of dollars in SMB sales.

AMGtech, a San Antonio-based IT integration company, uses Compaq products throughout its organization, including desktops, portables and ProLiant servers. "Compaq is our preferred technology provider and we recommend their products to our clients," said Gregorio R. Cortez, president, AMGtech. "Their products are very reliable and greatly enhance productivity."

SMB Market Challenge and Opportunity

The small and medium size business market is the largest and fastest growing segment of the IT market—and Compaq is committed, with its partners, to deliver customer value and enable success for SMB customers. Building on the momentum of its recently announced SMB market share growth in North America and recent enterprise wins, Compaq is delivering technology solutions to meet the diverse needs and budgets of small and growing businesses. Customers are at the center of Compaq's SMB strategy where systems are designed to ensure that decisions are based on their preferred method of procurement, fulfillment, integration and ongoing support.

Other Initiatives

Also, Compaq is working closely with Tech Data—one of its largest distribution partners—to accelerate SMB market momentum. Compaq invests in and works closely with Tech Data's TechSelect network of SMB solution provider partners.

These and other similar initiatives are driving focused marketing activities targeted at delivering products, services, and solutions to the millions of companies that make up the growing SMB market.

Complementing its strong partner strategy, Compaq created weekly and monthly marketing programs that also allow customers to buy direct if they choose. This method proved helpful to John Lesher, IT manager for Pulakos & Alongi, Ltd, an Albuquerque, NM-based CPA firm. He recently purchased a ProLiant ML370 server after seeing the product in one of Compaq's "Business Tuesday" advertisements.

"Compaq is a trusted IT advisor that is helping our clients' firms to grow," said Lesher. "We are using our new ProLiant server as a database server that will contain business critical client information."

Resellers looking for information on Compaq partner programs and initiatives can visit http://www.compaq.com/resellers/. For more information about Compaq's SMB offers and promotions, visit http://www.smb.compaq.com.

Company Background

Founded in 1982, Compaq Computer Corporation is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.