News release

Compaq Demonstrates Growing Momentum With Schools, Universities

Total Value of Education Agreements Exceeds $250 Million

Compaq Computer Corporation (NYSE: CPQ) today announced a series of new contracts with a broad range of education customers totaling more than $250 million, demonstrating the success of the company's strategy and continuing market momentum. The new education business includes an end-to-end solution provider agreement with the Houston Independent School District (HISD), worth more than $120 million if all options are exercised.

Compaq is executing effectively on the company's strategy across the board and especially in education, according to Jim Milton, senior vice president and North America general manager. "We're gaining tremendous momentum with local school districts, colleges, and universities across North America, proving that our strategy to provide end-to-end IT solutions is working," Milton said. "Nearly every major education contract we've signed recently calls for a multi-year commitment, which shows a strong belief in Compaq's ability to deliver innovative solutions not just today, but in the future."

The new three-year comprehensive technology agreement with HISD—the seventh largest public school district in the United States—covers innovative technologies including iPAQ Pocket PC handheld and Blackberry wireless devices, Evo laptops and desktops, industry-standard ProLiant servers, and services. (See related news release: "Houston Independent School District, 7th Biggest in US, Selects Compaq for Technology Initiative.")

"A key element of Compaq's strategy is building and delivering integrated, repeatable solutions that create value by solving customer problems," said Jim Weynand, Compaq vice present for State and Local Government and Education. "Customers want a technology partner who can pull all the pieces together and deliver integrated solutions at the best possible value."

Also, Compaq today announced five separate engagements with school districts purchasing under Compaq's contract with the State of New Jersey—Newark, Elizabeth, Jersey City, Cherry Hill, and Dover. The five New Jersey school districts combined represent more than $12 million in IT infrastructure upgrades covering more than 10,000 desktop units, over a thousand laptops, 155 Compaq ProLiant servers, and several Compaq wireless solutions. (See related news release: "Five New Jersey School Districts Standardize on Compaq Technology.")

Broad-based Momentum in K-12 Education

Compaq has recently won significant new business with public K-12 educators across the United States.

Looking for ways to help schools make technology available to a wider cross-section of students, Compaq will be a key provider of hardware and services under Round 5 of the Ohio SchoolNet agency's school funding program, which will total $37 million during fiscal years 2002 and 2003. The contract calls for Compaq to provide computers to public school districts, nonpublic school districts, and other K-12 educational entities in the state. (See related news release: "Compaq Included in $37 Million Technology Initiative for Ohio Education.")

Ohio SchoolNet focuses on ensuring Ohio schools offer the best in traditional education combined with the rich opportunities that technology provides.

"The tremendous response from educators demonstrates the industry's growing awareness that Compaq equipment enables effective data management, which can significantly improve student performance," said George Warren, Compaq K-12 director.

Another demonstration of Compaq's ability to deliver innovative solutions came with Chapel Hill-Carrboro City Public Schools in North Carolina. The school district there recently adopted a Compaq thin-client/industry standard server model that encompasses more than 3,500 computing stations throughout the school district.

Other recent K-12 education wins include:

• The nation's fastest growing school district, the Clark County School District in Las Vegas, Nevada, has named Compaq its vendor of choice for a $2 million technology upgrade. Clark County Schools is standardizing on ProLiant servers and Compaq Intelligent Manageability tools. (See related news release: "Compaq ProLiant Servers to Power Nation's Fastest Growing School District in $2 Million Technology Upgrade.")
• In Texas, the Dallas Independent School District is purchasing more than $2 million of AlphaServer high performance systems.
• Detroit Public Schools is purchasing $2 million of desktops and notebooks.

Growing Strength in Higher Education

According to Michael Humke, Compaq higher education director, Compaq is demonstrating tremendous growth in the higher education marketplace. "Compaq's sales to colleges and universities grew well over 50 percent in 2001 from the previous year," Humke said. "Leadership technology like the Compaq iPAQ Pocket PC enhances today's educational experience while preparing schools and students alike for the next generation of technology."

Centennial College, Toronto, Canada, recently entered into a 10-year strategic technology partnership with Compaq—valued at nearly $20 million (US)—spanning all aspects of computing from enterprise servers and storage through systems integration and handheld computers. The agreement will improve the quality of educational technology available to staff and students at Centennial College—ensuring a leading-edge computing environment for learning while decreasing the institute's total cost of ownership for technology. Plans for the future include the construction of a wireless unified messaging backbone and the development of new science and technology programs focused on wireless applications, eHealth, and eBusiness that will make Centennial College an international center of excellence in wireless technology.

Other recent Compaq agreements with higher education institutions—representing more than $75 million in contracts—include:

• The University of Wisconsin-Stout launched a $25 million mobility initiative to provide the latest Compaq enterprise-class notebooks to every freshman, giving students wireless access to the Internet and the school's network environment throughout campus.
• Arizona State University MBA students are being equipped with iPAQ devices, enabling graduate students to communicate and collaborate on advanced projects. Distributed to first-year ASU graduate students, the devices are pre-loaded with course syllabi, faculty and staff contacts and an academic calendar, the graduate admission packet, and related software. ASU selected the iPAQ hand held for its mobility, functionality, and versatility.
• A major bioinformatics research effort at the State University of New York includes high performance computing technology from Compaq—valued at more than $40 million. Compaq is providing high performance AlphaServer systems—running at 1 trillion operations per second—and Tru64 UNIX software for a 150,000 square foot facility at the Center for Excellence in Bioinformatics in Buffalo. The Center will enable drug design research and discovery, computational and 3-dimensional visualization projects, and development of new medical treatments and specialized computer products.
• The Medical College of Wisconsin recently has signed a $1 million AlphaServer SC and services contract. MCW will use Compaq's technology and services to support research on analyzing the rat genome sequence in concert with human and mouse genomes.
• The University of Texas at Arlington recently unveiled a new supercomputing farm consisting of 11 high-performance AlphaServer systems with 32 processors and 17 Compaq ProLiant dual processor servers.

Company Background

Founded in 1982, Compaq Computer Corporation is a leading global provider of information technology products, services and solutions for enterprise customers. Compaq designs, develops, manufactures and markets information technology equipment, software, services and solutions, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, personal desktop and notebook computers, and personal entertainment and Internet access devices that are sold in more than 200 countries directly and through a network of authorized Compaq marketing partners. Information on Compaq and its products and services is available at http://www.compaq.com.