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HP Wins Texas State Agency Contracts Valued at Nearly $90 Million
Latest Deals Make HP the Leading IT Hardware, Services Supplier for State Agencies in Texas
PALO ALTO, Calif., and HOUSTON, May 8, 2002
HP (NYSE:HPQ) today announced that it has been awarded several new contracts with Texas state agencies -- including contracts won with key business partners -- to provide IT hardware and services valued at nearly $90 million. With the addition of these contracts, HP becomes the leading IT hardware and services supplier to State of Texas agencies, accounting for nearly 30 percent of their aggregate IT budgets, following the company's merger with Compaq Computer Corp.
"Partners and customers choose to work with HP because of the breadth of our technologies and services and because we are intimately familiar with the challenges and needs facing the IT and business executives who support them," said Jim Milton, senior vice president and Americas general manager, HP. "These contracts underscore the value of our business model, which positions us for success with customers of all sizes.
"The multi-year nature of these contracts is representative of customers' belief in HP's ability to consistently deliver innovative solutions today and in the future at competitive and predictable prices," said Milton. "The company is focused on customers and their needs with laser-like precision and as a result we're demonstrating tremendous momentum in the marketplace."
Texas Department of Human Services
The Texas Department of Human Services (DHS) has been using an outdated, inflexible mainframe system to support more than 50 DHS services and more than 20 state agencies. When DHS began implementing the Texas Integrated Eligibility Redesign System (TIERS) project, the agency also began looking for a new IT system. TIERS is a new state initiative to provide workers with a single, integrated, Web browser-based system that will deliver various services to Texans in need. The initiative also will provide an Internet-based self screener that will enable the public to find out anytime, anywhere what types of health and human services assistance may be available to them (http://www.txstars.net).
After an extensive bid process, HP was awarded a one-year renewable contract (for up to five years) through one of the company's key minority resellers, TEICC. The terms of the contract allow the agency to lease desktop PCs, notebooks and file servers.
"While pricing was competitive," said Jim Weynand, vice president, Public Sector, HP Americas, "we believe the new HP's extensive services capabilities and flexibility in meeting customer requirements -- which our competitors couldn't match -- were the keys to winning the business."
"HP excels at working with customers to understand what they need to achieve with their IT investments and translating that knowledge into innovative solutions that solve real problems," said Jay Patel, vice president of marketing, TEICC. "Working together as true partners, we are able to add value to the overall solution and build long-term customer relationships."
Texas Department of Transportation
Another new blanket contract awarded through TEICC is with the Texas Department of Transportation (TxDOT). TxDOT is updating as many as 375 file, print and email servers -- distributed among more than 190 remote offices across Texas -- with market-leading, industry-standard ProLiant servers.
The contract builds on an extensive track record with TxDOT. In the past year, two other contracts with the agency valued at nearly $30 million called for desktop PCs, notebooks and key services. "We believe the new HP won in all three of these cases because of the added value brought to the table, including product quality, technical ratings and advanced services capabilities, including our partners," said Weynand.
Texas Lottery Commission
The Texas Lottery Commission recently chose to update its server infrastructure by ordering new industry-standard ProLiant ML570 servers.
The new business builds on a long-standing relationship with the Lottery Commission. Five years ago the agency chose industry-standard ProLiant servers as the standard for the agency's IT architecture.
A history of providing superior products and services also was instrumental in winning new business with other state agencies over the past three months. One contract calls for more than 80 industry-standard servers. The first order under another contract calls for 150 desktop PCs and 39 industry-standard servers. Plans for that project call for HP to provide installation services and hardware support for enterprise servers at the agency.
Austin Ribbon and Computer, a HUB certified reseller for the State of Texas, has worked with the state's customers for 17 years. "Our relationship with Compaq and its reputation for quality products made for an easy decision to offer Compaq equipment," said Jana King, president, ARC. "We look forward to continuing this relationship under the HP brand."
"Our record as a market leader providing quality, innovative products and integrated solutions underscored our merit with the state agencies in Texas over the other companies bidding on these projects," said Jim Weynand, vice president, U.S. Public Sector, HP.
Projects announced last year included a year-long technology refresh with industry-standard ProLiant servers at the Texas Rehabilitation Commission; desktop PCs and notebooks for the Texas Workers Compensation Commission; and an extensive desktop PC rollout for the Office of the Attorney General; as well as other agencies.
Accelerating Momentum with Customer Value
Today's announcements build on the fact that over the three-month period prior to its merger with Compaq Computer Corp. the two companies saw continued support from their customers despite current economic challenges and merger-related uncertainty. The two companies won an array of new contracts from customers with an aggregate value of approximately $5.3 billion over the lives of the contracts -- with particular strength coming from financial services, communications and manufacturing customers throughout the world. This momentum is due in large part to the customer value delivered through advanced, modular enterprise solutions based on industry-standard, open technology.
"We are relentless in our pursuit of innovations and standards to make it easier than ever before for customers to maintain and manage rapidly evolving IT architectures," said HP's Milton. "Our strong momentum in the marketplace and new customer business demonstrates that our efforts are paying off."
HP is a leading global provider of technology products, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. The merged company had combined revenue of approximately $81.7 billion in fiscal 2001 and operations in more than 160 countries. Information about HP and its products can be found at http://www.hp.com.
This document 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. Further, these forward-looking statements do not constitute new or amended overall financial guidance for HP, and any anticipated aggregate contract values referred to in this document do not independently provide a basis for determining the future timing of revenue.
All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues (including where the underlying contract has already been signed), 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 performance of contracts by customers and partners; 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 HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 (as filed with the SEC on March 12, 2002) and subsequently filed reports.
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