News release

Compaq Builds Momentum in Healthcare with Accelerated Solution Strategy

Strong Customer Growth a Result of Compaq's Innovation in Providing Technologies and Services for Healthcare; $300 Million in New Business

Compaq Computer Corporation (NYSE: CPQ) says the company's strategy to solve industry-specific problems with differentiated solutions is driving increased momentum in the healthcare marketplace.

Compaq outlined a heightened strategic focus on key vertical markets including healthcare in a memorandum from CEO Michael Capellas last June. Executing the strategy, the company organized vertically and marshaled resources to focus on healthcare providers and managed care organizations.

The results can be seen in the rapidly growing new business Compaq is winning with healthcare customers, according to Jim Milton, senior vice president and North America general manager for Compaq. "Since September, Compaq and its partners in healthcare have closed sales in North America that will bring in more than $300 million in new business to Compaq over the next three to five years," Milton said.

Partnering is Essential to Healthcare Solutions

"Compaq excels at the kind of deep partnering it takes to architect and build the highly tailored solutions that healthcare organizations require," Milton explained. "Our partners and customers choose to work with Compaq with increasing frequency because of the breadth of our technologies and services, and because we are intimately familiar with challenges and needs facing healthcare providers and the IT and business executives who support them."

Compaq today announced that its physician mobility partnership with Allscripts Healthcare Solutions (Nasdaq: MDRX) produced more than $20 million in new sales for Compaq during its first year. Also, the two companies announced significant enhancements to the partnership to accelerate marketing of their joint solutions and deliver a wider range of services options, including participation in Compaq's strategic Computing On Demand initiative. (See related news release: "Compaq and Allscripts Cap Banner Year With Expanded Partnership Agreement; First Year Yields More Than $20 Million in Sales.")

Compaq has quietly built a leading presence in healthcare IT over many years by partnering with providers of clinical and hospital information systems, including such market leaders as Cerner Corporation, Siemens Medical Solutions, IDX Systems, Meditech, and McKesson HBOC.

For example, Compaq Global Services operates a laboratory in Nashua, NH, where IT professionals work closely with Cerner to ensure that the ISV's Cerner Millennium solutions integrate smoothly with Compaq technology platforms. Compaq technology experts work side by side with Cerner professionals to tailor and support solutions in each customer's unique operating environment.

With years of common experience and familiarity with the healthcare environment, Compaq also assists Cerner in architecting and deployment of new services to offer healthcare provider organizations across North America.

"From a healthcare provider's perspective, this kind of partnering is leverage in their favor, helping them get the most from their IT investments and make the most of what are increasingly strapped internal resources," added Milton. "From Compaq's perspective, this is a key strategy to serve the healthcare industry."

Healthcare Technology From Data Centers to Handhelds

"The healthcare industry is unlike any other. Thousands of providers are serving patients locally and at the same time must be able to deal with an increasingly digitized, networked, and Web-enabled set of requirements, driving to meet national and international standards for records and transactions," Milton stated. "Compaq has a unique set of technologies, knowledge, and breadth of service and support capabilities in the healthcare industry, bringing the ability to radically simplify our customers' technology puzzles."

San Diego-based Sharp HealthCare chose Compaq services and products to expand and update their information system infrastructure and user access devices, including: additional server capacity for Sharp HealthCare's clinical information system, conversion of messaging and collaboration systems to Exchange 2000, data storage system enhancements, desktop computers, and wireless communications supporting mobile applications for physicians and other patient care professionals. (See related news release: "Sharp HealthCare Chooses Compaq Services, Equipment for Systemwide Upgrades.")

IT upgrades at Sharp include installation of StorageWorks consolidated disk systems and Storage Area Network (SAN) technology, and a network of industry standard ProLiant servers. Compaq NonStop Himalaya servers running the NonStop SQL database will be the foundation for Sharp's electronic medical record system. Sharp is working with IDX Systems Corporation to implement its LastWord clinical repository and physician order entry system on the fault-tolerant, massively scalable NonStop platform.

Also, Compaq AlphaServer systems are enhancing Sharp's core IT systems, running with IDXtend®, an integrated, enterprisewide, Web-based business performance solution. Compaq also provides an array of technologies and services to teaching hospitals. Another example in this vital area of healthcare is the Medical College of Wisconsin, which is implementing a new AlphaServer SC and new services contract with Compaq Global Services. The Medical College of Wisconsin will use Compaq's technology and services to support research on analyzing the rat genome sequence in concert with human and mouse genomes.

Virginia Commonwealth University's Medical College of Virginia Hospital (MCV) illustrates the potential impact of Compaq's industry standard building blocks on the practice of medicine itself. MCV has adopted an imaging storage and distribution system offered by Compaq Solutions Alliance member Imaging Archive International, LLC, (IAI) that allows simultaneous viewing of digital diagnostic images in multiple locations.

Based on industry standard ProLiant servers, Compaq workstations, and StorageWorks technologies, IAI's solution is scalable to any need and affordable enough to place in remote clinics or even physician home offices, easing and speeding diagnostic reports and consultations without requiring transportation of film images—or patients—between locations.

Supporting Healthcare IT with End-to-End Solutions

Baptist Memorial Health Care Corp. in Memphis, Tennessee recently launched a $5 million effort to consolidate hospital and medical group information systems for greater efficiency and easier expansion. A new Compaq SAN-based enterprise storage network will allow Baptist to build out its IT infrastructure in phases to meet the rapid growth of data created by new imaging such as radiology systems and scanned medical systems.

The IT effort at Baptist includes three TB of storage and over 64 servers, integrating a solution that includes industry standard ProLiant Windows 2000 servers, ProLiant Netware servers, OpenVMS AlphaServer GS systems, and StorageWorks Fibre Channel SAN and SAN-based tape libraries.

Cardinal Health, a global healthcare company based in Dublin, Ohio, chose Compaq as its exclusive provider of distributed IT equipment. Under a new contract announced late last year, Cardinal Health is adding ProLiant servers, desktop PCs, and Armada laptops to its well-established Compaq AlphaServer systems running Tru64 UNIX and StorageWorks storage products to the company's IT infrastructure. Compaq is replacing Dell, Hewlett-Packard, and IBM as providers of industry standard systems in various Cardinal divisions in a multi-year contract valued at more than $20 million per year.

Innovative and cost-effective access products are important elements in meeting the complete IT requirements for healthcare providers. A recent $10 million agreement with Beverly Enterprises Inc. named Compaq the company's preferred IT personal computer vendor. The first project under this agreement involves the rollout of more than 8,000 desktops systems to more than 475 Beverly locations across the U.S.

"Our core strength includes leveraging the advantages of industry standard technologies with the correct balance of custom architecture to meet any one customer's current needs without pointlessly scrapping their legacy systems," said Compaq's Milton. "In a word, we're great at building scalable systems that talk to each other—which is exactly where the healthcare industry wants to go."

An excellent example of Compaq's scalable systems capability is found in the large, state-of-the-art enterprise storage area network (SAN) Compaq is installing at Valley Baptist Health System in Harlingen, Texas. Based on two Enterprise Virtual Arrays, the SAN implementation includes a large tape library and uses Veritas Net-Backup software. The $1.2 million SAN at Valley Baptist Health System is being installed by Compaq Global Services.

Valley Baptist Health System relies on other key Compaq technologies to power its IT infrastructure, including Compaq NonStop Himalaya servers running clinical application software from IDX Systems Corporation. The health system also uses AlphaServer mission-critical systems and industry standard ProLiant servers, as well as Evo desktops, workstations, and laptops and iPAQ handheld devices.

According to Tom Watkins, VP & CIO at Valley Baptist, Compaq technologies will make up approximately 80 percent of Valley Baptist Health System's total IT infrastructure; the remaining 20 percent represents UNIX servers and printers from Hewlett-Packard. "We're pleased at the prospect of our two most important IT vendor partners joining together," said Watkins. "We look forward to an enhanced relationship with the new company."

Enhanced SMB Support

Also, Compaq has launched a combination of new initiatives with partners and through direct and agent programs to meet the rapidly changing IT needs of small and medium-size (SMB) healthcare customers. For example, Atlanta-based Phoenix Health Care Management Services, Inc., uses Compaq products throughout its 250-employee organization. Compaq technology for the healthcare concern includes desktops, portables and the industry-standard ProLiant ML370 server.

"Compaq is our preferred technology provider," said Zann Moon, operations coordinator at Phoenix. "Their products are very reliable and greatly enhance our productivity."

The Living Bank—the oldest and largest non-profit donor education organization in the U.S.—is deploying industry-standard Compaq ProLiant servers as the foundation for the first Internet-based organ donor registry. (See related news release: "Compaq Powers First Internet-based Organ Donor Registry.")

"Compaq has the depth and breadth of product line and services that can help smaller organizations make incremental changes that have a huge impact in meeting their goals," said Milton. "Our ability to deliver scalable and easy-to-manage technology solutions is what distinguishes Compaq from other IT vendors in the market."

SPECIAL NOTE TO EDITORS:

Several news releases outlining other recent significant Compaq wins—issued prior to today's new-business announcement with Allscripts, Cerner, Sharp HealthCare, and Valley Baptist Health System, cited above—are available at http://www.compaq.com/newsroom/index.html including:

• Medical College of Wisconsin Invests $1 Million in Compaq Supercomputing Technology and Services
  
• Imaging Archive International and Compaq Bring Top Medical Expertise Virtually Anywhere (with Virginia Commonwealth University's Medical College of Virginia Hospital)
  
• Compaq IT Solution Just What the Doctor Ordered (with Baptist Memorial Health Care Corp.)
  
• Compaq and Cardinal Health Sign Multi-Year IT Agreement
  
• Compaq Signs $10 Million Product and Services Agreement with Beverly Enterprises Inc.

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.