News release

HP Extends Smart Office to Help Small and Mid-size Businesses Increase Productivity, Lower Costs

New products, services and channel programs from HP enable customers to get better business results from technology investments

To help small and mid-size businesses increase their productivity, lower information technology costs and solve day-to-day business issues, HP today announced new imaging, printing, storage and thin client products as well as joint channel programs with industry leaders Microsoft, Avaya, Intuit and SAP.

Additionally, the company launched a new security assessment service and upgraded financing options to help customers access the technology their businesses demand while managing cash flow and capital costs.

HP is the leading technology provider to the global SMB market, with annual sales of approximately $23 billion. The expansion of its portfolio builds on the success of the company's Smart Office framework, first announced one year ago, to provide customers with reliable, high-quality products and solutions; local and specialized expertise; and a simplified experience with technology.

"No company understands and meets the needs of small and mid-size businesses better than HP, and we're committed to continued leadership in this important and growing market," said Kevin Gilroy, senior vice president and general manager, Small and Medium Business, HP. "Customers know that when they choose HP, they get a relationship, not just a transaction. By developing products and services for the unique needs of small and mid-size customers, HP delivers a superior ownership experience, so customers spend less time worrying about technology and more time focused on their business."

Reliable products, simpler solutions, right for businesses

HP released more than 20 new imaging and printing systems and solutions, including enhanced laser and inkjet printers, digital projectors and networking and mobile printing accessories, all of which address the needs of business customers. The lineup offers customers HP's fastest color and laser print speeds to date; one of the industry's first gigabit print servers; advanced security features for transferring data across a network; and, easy-to-use connectivity options including mobile wireless printing that enable simple walk-up printing when on the go.

Today's announcement marks the company's largest-ever introduction of HP LaserJet printers including six printing platforms totaling 33 new individual products. These products represent 50 percent of the entire inventory of HP LaserJet printers on the market today.

HP customers are unlocking the benefits of color printing more than ever before - in fact, analyst firm IDC found that in the second quarter of 2004 HP's U.S. color page printer market share jumped 12 points sequentially to 51 percent.⁽¹⁾

According to Melody Brenna, chief executive officer of Milestone Architectural Ornamentation, Inc., a 25-employee firm, the challenge for a small business is promoting products without the advantage of an ad agency or a big budget. To solve this problem, Milestone relies on HP for printers and supplies, from toner and ink, to paper and special media.

"It is critical that Milestone's custom antique cast stone replications be visually presented to potential clients through printed collateral that accurately captures the color, textures and wide range of our stone applications," said Brenna. "HP's cost-effective, easy-to-use imaging and printing solutions allow us to design and print these in-house. Now, our timely, personalized brochures and quotations not only assure us a reservation at the table of consideration alongside our larger, better known competition, they have dramatically improved our closing ratios."

Some of the imaging and printing solutions being introduced include (all prices are U.S. estimated street prices)⁽²⁾:

• HP Business Inkjet 1200: HP's lowest running cost color printer, the HP Business Inkjet 1200 provides small businesses with the speed, performance and connectivity needed to produce high-quality color documents quickly. It also comes standard with automatic two-sided printing - $199.⁽³⁾



• HP Jetdirect 625n Gigabit Ethernet print server: One of the first in the industry to use Gigabit Ethernet technology, the 625n print server increases network bandwidth, enabling customers to print text and graphic-intensive documents faster, and providing investment protection for future Gigabit network environments - $389.



• HP Officejet 7410 All-in-One: Delivering breakthrough speed (up to 30 pages per minute (ppm) black, up to 20 ppm color), built-in wireless networking and remote printing capabilities, the HP Officejet 7410 All-in-One is well-suited for the home-office professional looking for a complete, integrated, easy-to-use all-in-one device. The unit also features professional photo quality, increased productivity with automatic duplexing, legal-size copying and scanning, copy collating and an extra 250-sheet paper tray - $499.



• The HP LaserJet 4350: HP's fastest single-function workgroup printer, with speeds up to 55 ppm, the 4350 meets the high-volume printing and networking needs of workgroup users - starting at $1,649.



• HP Color LaserJet 5550 printer series: The 5550 is HP's fastest color laser printer, ideal for companies of all sizes that want superb print quality from an easy-to-use, wide format, network color laser printer - starting at $3,549.

More information about all of HP's imaging and printing systems, as well as additional services, partnerships and solutions announced today, is available in a news advisory in an online press kit at http://www.hp.com/go/SMBtechxny04.

HP also announced new storage and computing products designed to reduce business risk:

• The HP Compaq Thin Client t5510 and t5710 provide a simple, secure, server-based desktop computing experience with an unmatched combination of price and performance for multiple platforms; smart, secure choices for customer-facing business environments such as the financial, medical, real estate or legal industries.



• The HP StorageWorks NAS 500s Storage Server provides easy-to-deploy, centralized storage for file sharing, print services, application storage services and Microsoft® Exchange hosting. The new network-attached storage system offers the industry's first affordable, yet powerful, entry-level Windows®-based tower design.



• The HP iSCSI Feature Pack allows customers to leverage existing investments in Ethernet to migrate to networked storage, making HP among the first network attach storage vendors using Windows to offer iSCSI functionality.

More information on HP's extensive storage and thin client offerings are available at http://www.hp.com/sbso/busproducts.html.

Access to expertise

HP's new joint programs with Microsoft, Avaya, Intuit and SAP help channel partners more effectively deliver hardware, software, services and support for a superior technology ownership experience for small and mid-size customers. These new Smart Infrastructure and Business Application Solution offerings are part of HP's strategy to work together with industry-leading partners to provide the tools, solutions, training and support channel partners need to better serve their customers, reduce business risk for customers and expand their businesses.

Today's announcements include:

• HP and Microsoft are expanding the "Partner Reach" program to provide combined hardware and software solutions to more than 2,000 shared channel partners across the United States. The program equips channel partners with technical, sales and marketing tools to transform HP and Microsoft technology into solid business solutions. More information on the "Partner Reach" program is available at http://www.hp.com/solutions/microsoft/partner-reach.



• HP and Avaya announced plans to jointly develop channel programs to provide U.S. small business customers with reliable, compliance-tested voice-over-IP solutions that help reduce networking costs through the utilization of a single, unified voice and data network - delivering complete hardware, software, service and support solutions from a single source.

New Smart Business Application Solutions, which help automate core business processes, include:

• In the United States, HP and Intuit have collaborated to make it easier for both channel partners and HP direct customers to buy business management solutions with new bundled offerings including Intuit's top-of-the-line QuickBooks: Enterprise Solutions software and select HP servers, to help small and mid-size businesses gain control over their financial data and grow as they move to a dedicated server environment.



• Building on a memorandum of understanding to build joint go-to-market programs signed earlier this year, HP is among the first technology vendors to sign a global agreement with SAP to drive reseller linkage to simplify the purchase and after-sales support experience for small and mid-size customers. HP and SAP will provide cross-training on both company's product sets, funding to drive joint lead generation, and sales incentives for both channel partners and customers.

HP also has moved to simplify the technology experience for Hispanic business owners through the launch of a new U.S. website presented entirely in Spanish. The site highlights the full portfolio of HP products and services and HP has a dedicated team in place to best provide the U.S. Hispanic SMB business community with specific tools and resources they need. More information is available at http://www.hp.com/go/hispanic.

Simplified experience with technology

HP Smart Support is a portfolio of services and support designed to provide expert support, easier management and flexible financing options so customers can spend more time focused on their business and less time worrying about technology.

HP's latest offering, called HP Security Vulnerability Assessment for SMBs, is a first of its kind security service from a major IT provider. As part of the assessment service, HP security experts prepare an analysis unique to each customer's information technology environment with clear direction on the steps to take to make their network more secure, all in strict confidence, and at the most affordable price in the industry.

Available in the United States and Canada in two levels, basic or enhanced, this service can be purchased directly from HP or an authorized reseller at a six-month special introductory price as low as $1,495⁽³⁾ through April 30, 2005.

The new assessment service builds on the existing HP portfolio of business protection services that provide customers with cost-effective ways to keep business up and running. More information on these offerings is available at http://www.hp.com/go/securityassessment.

Financing the Smart Office

HP also has extended its Smart Finance service offerings in the United States and Canada until Jan. 31, 2005, with three HP Financial Services programs⁽⁵⁾ and promotions that make it easy on micro, small and medium businesses' current IT budgets to acquire HP solutions.

For smaller businesses, HP is now offering a 60-day payment deferral, allowing customers spending a minimum of $349 to defer payment for 60 days. Or, they can choose a zero percent lease rate for purchases financed for 24 months or on qualifying printers financed for 36 months.

In addition, HP is offering its Better Together lease program through Oct. 31, 2004, making it easier and more affordable for small business customers to own more technology. The more qualifying services, software or server and storage products a customer chooses to lease, HP Financial Services will lower the financing rate available. More information about HP Financial Services offerings is available at http://www.hp.com/hpfinancialservices/small_medium.html.

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 July 31, 2004, HP revenue totaled $78.4 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

⁽¹⁾ Source: IDC's Worldwide Quarterly Hardcopy Peripherals Tracker 9/16/04.

⁽²⁾ Actual prices may vary.

⁽³⁾ Running cost comparisons based on supplies usage (ink or toner and customer replaceable parts only) at 5% per color and 5% black per page. This is an internal comparison among HP color laser and ink printers and is based on HP estimates of resale price. Actual prices may vary.

⁽⁴⁾ Prices shown are available directly from HP. Reseller prices may vary. Prices are subject to change without notice.

⁽⁵⁾ Lease products available through Hewlett-Packard Financial Services Company (HPFSC) to qualified commercial customers in the United States and Canada and are subject to credit approval and execution of standard HPFSC documentation. Other fees and restrictions may apply. HPFSC reserves the right to change or cancel this program at any time without notice. This promotional offer cannot be combined with other offers.

Microsoft and Windows are U.S. registered trademarks of Microsoft Corp.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services 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 Quarterly Report on Form 10-Q for the period ended July 31, 2004 and other reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2003. HP assumes no obligation and does not intend to update these forward-looking statements.