News release

HP Targets Small and Medium Businesses with Smart Office Initiative

HP backs initiative with $750 million investment designed to help SMBs get more from technology

HP (NYSE:HPQ) today announced its Smart Office initiative for small and medium-sized businesses (SMBs), which provides tailored support services, local expertise, and products to help SMBs manage their unique business needs.

"HP is the worldwide leader in this customer segment today generating more than $21 billion in revenue annually and we intend to extend our leadership as the preferred go-to partner and supplier of technology to SMBs," said Carly Fiorina, HP chairman and chief executive officer.

"This initiative includes products, technology solutions and partnerships specifically designed to meet the needs of SMB customers and is backed by a $750 million investment in R&D, marketing, sales programs and services," said Fiorina.

The initiative is built on three core principles:

• Providing the right expertise. HP's global presence and its extensive network of partners provide SMB customers with the right expertise to determine how technology can make their business more successful.
  
  
• Delivering "better together" technology offerings. HP provides a complete portfolio - including printing/imaging, PCs and infrastructure - of reliable, thoughtfully designed products and technology solutions that are easy to integrate and engineered to work better together.
  
  
• Ensuring technology is easy to own. HP provides SMB customers with what they need to get the most from their technology - reliable, uncomplicated and comprehensive support and financing options that help their business run more smoothly.

As part of today's launch, HP announced more than 100 different products, solutions and services that help SMB customers get more from technology, including:

• HP Care Pack services, an integrated set of warranty extension packages that provide application support, data backup and recovery for SMBs;
  
  
• HP Smart Finance offerings to simplify multi-vendor purchasing, trade-ins and recycling;
  
  
• The Mobility Now initiative, including the HP Mobility Solutions Center, an online resource for easy-to-use wireless solutions including hardware, software and service packages, and the latest HP ProCurve access points for secure Wi-Fi (wireless fidelity) connectivity;
  
  
• HP ProLiant servers with pre-installed, tested and optimized Microsoft Windows® Small Business Server 2003, an integrated suite that supports 75 users right out of the box;
  
  
• New desktop systems including an HP Integrated Work Center, HP Desktop Access Center and a Healthcare PC; and
  
  
• New imaging and printing solutions to help SMBs improve communications and reduce costs.

"We are launching a sustained effort to ensure the needs of this important customer segment are understood and translated into products and services that exceed their expectations," said John D. Brennan, HP senior vice president of worldwide SMB. "Our SMB customers understand the benefits of technology and how it can help their business. More than ever, they want to work with a technology partner that can ensure they get more business results, however and wherever they work, with reliable, uncomplicated products and technology solutions and comprehensive support from HP."

Providing the Right Expertise

HP offers easy access to expertise to help SMBs get better business results - in person through an extensive global network of partners, via online resources like free live chat and Web-based seminars, and over the phone.

Building on the success of its Imaging and Printing Expertise Centers, HP is developing comprehensive SMB Expertise Centers around the world. In the United States, HP.com Business to Business provides SMBs with a personalized Web site and a dedicated small and medium business store. The personalized site makes it easy to order and track purchases of HP equipment and solutions and complements HP's extensive network of partners.

Through its PartnerOne SMB networks in the United States and Latin America, HP is dedicating resources and pledging support to its channel partners who focus on the SMB market.

In Europe, HP and Microsoft are charter members of the first European Small and Medium Enterprise Vendor Forum, a group of industry leaders that includes American Express, Cisco, Eurochambres, Intel, Symantec and Vodaphone.

Delivering "Better Together" Technology Offerings

HP provides a solid technology foundation for SMBs: HP PCs, printing and imaging products, servers, storage, workstations, networking solutions and other emerging technologies are engineered to work together, simply and easily.

Today, HP introduced the HP Integrated Work Center, HP Desktop Access Center and two new flat panel monitors. In mid-October HP will begin shipping Microsoft Windows Small Business Server 2003 preloaded on HP ProLiant servers. The complete package is pre-installed, integrated and optimized to work right out of the box. Microsoft Small Business Server is a network solution for businesses with up to 75 computers and contains an integrated suite of server products that enables small-business customers to ensure that their data is automatically protected, significantly increase their productivity and improve their connection with customers.

HP Imaging and Printing Offering

HP also today announced innovative imaging and printing systems that deliver on specific SMB needs to develop powerful, professional communications while helping reduce costs and increase efficiencies.

New products include:

• The HP Color LaserJet 9500 printer: provides powerful printing of color-rich do-it-yourself marketing materials with high-quality color graphics, text and image clarity.
  
  
• The HP Deskjet 5850 printer: combines ease of use with built-in wired Ethernet networking and wireless (802.11b) printing for up to five users, six-ink printing, up to 4,800 x 1,200-optimized dots per inch (dpi).
  
  
• The HP Deskjet 9600 series printers: offers six-ink printing, 4,800-optimized dpi and four-sided, borderless printing on a variety of HP papers including A6 size postcards to A3/11 x 17-inch size posters.
  
  
• HP Business Inkjet 1100 series printers: ideal for high-productivity individuals or small work teams, comes with a host of cost-saving features.
  
  
• HP LaserJet 1010, 1012 and 1015 printers: offer affordable, high-quality, compact and network-based printing - so more employees can share the same printer.
  
  
• HP Digital Projector mp3130: the brightest digital projector in the under four-pound category, this mobile projector connects wirelessly to PCs, personal digital assistants and other wireless-based devices.
  
  
• HP ProCurve Wireless Access Point 420: provides secure wireless connectivity based on current 802.11b standards and allows for future 802.11g upgrades.

HP Offers Products and Advanced Solutions Tailored for SMBs

As part of its Mobility Now program, HP is introducing the Mobility Solutions Center (http://www.hp.com/go/mobilitysolutionscenter) in the Americas, a new online resource for SMBs. Three categories of easy-to-use wireless solutions - Mobilize Your Data, Mobilize Your Office and Escape Your Office - include everything from hardware to software to wireless cards and service packages. These quality mobile solutions work together to deliver SMBs reliable wireless capabilities that can help increase their productivity and extend their reach.

HP, Microsoft and select software vendors announced today the Healthcare PC, which features a "drop in the box" software bundle preinstalled with Microsoft Office 2003. The Healthcare PC joins a growing list of vertical industry solutions supporting legal services, accounting, and real estate.

HP Ensures Technology is Easy to Own

For products and technology solutions to be easy to own, they must be reliable, well supported and economical. HP offers extensive support to help SMBs keep their technology systems up and running, protect their data and information, and make sure their employees have what they need to be productive.

To simplify the tracking, management and ordering of HP supplies, SMB customers can streamline their purchase through the HP SureSupply online ordering service. The system automatically sends an alert via e-mail, text message or pager when HP print systems are low. SureSupply facilitates the re-order process with a few clicks, linking customers to their preferred reseller Web site, where supplies are pre-selected and ready for purchase.

HP's award-winning HP Business Support Center at http://www.hp.com/bizsupport provides troubleshooting tools, downloads and drivers, an extensive search capability and community forums. The HP Instant Support Professional Edition at http://instantsupport.hp.com delivers online diagnostics, customer/end user configuration data gathering and Active Chat with HP.

HP introduced three Care Pack services in the United States designed specifically for SMBs and available either directly from HP or from HP's network of authorized solution and service providers. These Care Packs include:

• User Applications Support for SMBs. Provides a single point of contact for expert, responsive technical information and usage assistance for more than 160 of the most popular software applications.
  
  
• Electronic Vaulting OnLine Backup/Recovery for SMBs. Provides online backup and restore for multi-platform servers running Windows 2000/2003, featuring continuous online backup and byte-level replication of data.
  
  
• Recover-All for SMBs. Extends the HP warranty or basic maintenance agreement for HP ProLiant servers to provide coverage for a wide range of natural and man-made disasters, accidents and environmental hazards.

Introducing Smart Finance

HP Smart Finance services feature multi-vendor financing and leasing programs that are available directly or through channel partners. HP also announced a special financing program, available in the United States between Oct. 1 and Dec. 31, 2003, that lets customers choose between a zero percent lease rate or no payments until 2004. In addition, HP is launching a Smart Combo Lease Rebate program that reduces costs for customers who lease multiple HP products.

Smart Finance also provides trade-in and trade-up capabilities, along with complete product lifecycle management, including recycling.

Additional information on Smart Office

HP made a number of other announcements as part of its Smart Office initiative. More information regarding these announcements as well as further details on the offerings above is available in a virtual press kit at http://www.hp.com/go/smbgetmore.

About HP Small and Medium Business

HP is the world's largest IT provider to small and medium businesses, with more than $21 billion in annual revenues. HP provides the SMB marketplace with products such as printers, servers, mobile devices and PCs, as well as financing, vertical solutions and specialized services to allow business owners to get more for their technology needs. To date, HP has more than 210,000 partners worldwide offering local reach and expertise. HP was named the Small Business Champion for 2003-2004 by the U.S. Small Business Administration and elected to the SBA Hall of Fame for its leadership and support of small business.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing for consumers, enterprises and small and medium businesses. For the last four quarters, HP revenue totaled $71.8 billion. More information about HP is available at http://www.hp.com.

Microsoft is a U.S. registered trademark of Microsoft Corp.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development and performance of these products and services may not proceed as planned; 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 for the fiscal year ended October 31, 2002 and subsequently filed reports, including its quarterly report for the fiscal quarter ended April 30, 2003. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements.