News release

Compaq Announces Next Evolution of Computing on Demand

Compaq's "Pay-As-You-Use" Model Extended to New Storage, Server and Access Programs

Compaq Computer Corporation (NYSE: CPQ) today announced the next phase in its Computing on Demand strategy, unveiling three new offerings that give enterprise customers increased flexibility and control over the design, management, and cost of their IT (Information Technology) infrastructure.

"The ability to scale computing power and availability up or down depending on needs opens unprecedented opportunities for customers who need scalability and availability during times of peak demand, but also need to keep their costs under control," said Peter Blackmore, executive vice president, Worldwide Sales and Services, Compaq. "Compaq's latest Computing on Demand offerings give customers complete control, enabling them to place valuable resources where they are needed most."

The newest offerings are:

• Capacity on Demand - Managed Storage Solution
• Capacity on Demand for ProLiant Servers - Pay Per Use
• Access on Demand - Thin Client Package

These offerings combine Compaq Global Services' architecture, management, and support capabilities with strengths in technology—servers, storage, and access devices—delivering computing resources when customers need them, where they need them, and at predictable price and performance levels.

In an IDEABYTE report entitled "Computing on Demand," Julie Giera, vice president/research leader of Giga Information Group, Inc., discussed the benefits that on-demand offerings bring to the marketplace. "The value proposition," Giera stated, "is comprised of flexibility, intellectual capital in the form of knowledge and experience, and mitigation of risk."

The Newest Offerings

Capacity on Demand - Managed Storage Solution eases the burden of storage management and provides a simple path to meet unanticipated storage requirements by delivering storage management and capacity on a "pay-per-use" basis. This new solution will enable Compaq to remotely manage and monitor heterogeneous storage environments ensuring customers a greater return on investment. Customers can access a secure, dedicated Web portal to dynamically view their storage infrastructure and make service requests to Compaq remote management centers. Capacity on Demand - Managed Storage Solution also allows customers to better predict and distribute costs to their user base. This solution offers "dial-up" and "dial-down" capabilities allowing customers to decrease immediate costs when their storage usage decreases.

Capacity on Demand for ProLiant Servers - Pay Per Use allows customers to install and reserve computing power—ready to put into service instantly without any disruptions to systems or applications. This new program enables customers to pay for the service based on measured CPU consumption. This program is powered by industry-leading ProLiant servers that provide for dynamic resource scaling of 4-way, and 8-way ProLiant servers supported by a full suite of lifecycle services. Customers can enjoy faster time to deployment, improved inventory management, increased IT asset utilization and the ability to meet fluctuating demand for computing resources, enabling them to provide the highest quality service levels.

Access on Demand - Thin Client Package is the latest enhancement to the Access on Demand program. This new package capitalizes on increased market demand for thin client computing. The new Access on Demand - Thin Client Package enables companies to build a low-cost, easy-to-support, secure utility solution that is perfect for accessing major applications residing on a central server. This package, ideal for customer service or transaction-intensive user populations such as call centers, simplifies the procurement and support of enterprise computing environments with per seat/per month pricing. The Thin Client Package complements the previously announced Access on Demand offerings for PC and mobile computing.

Introduced in July of 2001, Computing on Demand changes the way services and technology are provided to customers across the globe. A suite of offerings—ranging from standard building blocks to fully customized outsourcing options—Computing on Demand solutions allow customers to focus on their core business while the experts at Compaq attend to their IT needs. Computing on Demand offerings are designed to meet the needs of worldwide enterprises, medium-size businesses and service providers.

Computing on Demand customers already include companies such as American Express, Bank of America, Franklin Templeton Investments, Ericsson, Digex, Acxiom Corporation, Richardson (Texas) Independent School District, and Blue Cross Blue Shield of Michigan.

For more information on Computing on Demand please visit http://www.compaq.com/cod/.

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.