News release

HP Survey Shows Business Prospects Improving for Small- to Medium-size Businesses in the United States

Technology key to competitiveness and productivity, according to SMBs

Survey results revealed today show U.S. small- and medium-size businesses (SMBs) forecasting improved business prospects and increased hiring this year. Conducted by Penn, Schoen & Berland Associates, Inc., the survey was sponsored by HP, the world's leading provider of technology solutions to the SMB market.

According to the survey, which polled more than 500 small businesses in early May, 62 percent of U.S. small and medium business senior leaders see business improving this year while 49 percent said they are likely to hire and retain new employees over the next year.

Furthermore, 79 percent of those surveyed agreed that for most SMBs to survive in today's economic conditions, they need to be technologically on par with, if not superior to, larger corporations. An overwhelming 96 percent of those senior executives agreed that "up to date" technology is a more valuable asset today than ever.

"As the United States celebrates Small Business Week May 16 - May 22 and the positive impact of small businesses on our overall economy, it is encouraging to see the economic and job growth these businesses are expecting for the upcoming year," said Robyn West, vice president, Small and Medium Business, HP Americas. "At HP, we've long recognized the need for technology to be uncomplicated and affordable for small and medium businesses to keep competitive. Our goal is to continue to provide the right mix of products, solutions and services designed specifically for small and medium businesses to help them get more business results from their technology."

The SMB market will continue to increase technology spending in the upcoming year, according to the survey results. Forty-four percent of companies surveyed said spending would increase up to 10 percent, while 17 percent were especially bullish, believing their spending would increase between 11-20 percent.

SMB leaders also agreed that keeping up with key technology advancements such as mobility solutions helps them to remain competitive. Seventy-seven percent of those surveyed agreed that mobility is important – that they need to stay connected or have employees stay connected when away from the office.

Also critically important to small business productivity is the existence of locally based computer experts and customer support. According to the survey, 85 percent of U.S. SMBs say they depend on locally based technology experts to minimize downtime and ensure productivity; most U.S. SMBs prefer outside experts to install and configure new PCs and peripherals and don't have in-house staff perform these tasks.

More information on the findings of the survey is available at http://www.hp.com/hpinfo/newsroom/press/2004/smb_survey_report_5-14-04.pdf.

Survey methodology

Penn, Schoen & Berland Associates conducted 501 telephone interviews among senior decision makers of small- and medium-size companies on May 3-7, 2004, such as owners, chief operating officers, operators or other senior decision makers of U.S. SMBs. The SMBs were defined as those with 999 or fewer total employees.

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 the four fiscal quarters ended Jan. 31, 2004, HP revenue totaled $74.7 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at www.hp.com.