News release

SBC Communications and HP Announce Strategic Alliance for Integrated IT and Telecom Managed Services

Companies Collaborate to Provide Businesses with Services Ranging from Desktops to Networks

SBC Communications Inc. (NYSE:SBC) and HP (NYSE:HPQ; Nasdaq: HPQ) today announced a strategic alliance to help U.S. businesses streamline the management of complex IT and communications environments. The companies, capitalizing on their respective world-class capabilities, plan to provide enterprises with a one-stop, one-call approach to management of complete IT solutions - from PCs and servers to the communications networks that tie them together.

Expanding their long-term relationship, the SBC family of companies and HP intend to work together to develop, deliver and market a portfolio of highly adaptable packaged services that integrate telecom and IT to provide end-to-end managed solutions for enterprise businesses.

For enterprise customers, the alliance provides an opportunity to consolidate ongoing management of the most common IT infrastructure needs: voice and data networks; equipment such as servers, PCs and printers; and desktop software. The integrated solutions are designed to help companies increase productivity and minimize total cost of ownership, particularly when facing key challenges such as implementing new convergence solutions or integrating branch office operations into corporate networks.

Both companies plan to begin jointly marketing each company's services in the first quarter of 2005, and currently plan to develop additional joint offerings, including services designed for smaller businesses, later in the year.

Integrated Solutions for Enterprise Businesses

SBC companies and HP plan to jointly market a portfolio of managed solutions that utilizes HP's expertise in IT and carrier-grade technologies with SBC companies' leadership in advanced communications networking, such as Voice over Internet Protocol (VoIP) service for businesses. The anticipated program would be designed to enable enterprise businesses to take advantage of a customized set of integrated telecom and IT technologies, with the added simplicity of a single point of contact and a single bill. This program would be focused on helping businesses with six common infrastructure challenges:

• IT and telecom convergence technologies
• Mobile data services
• Wide-area networks (WAN)
• Network and infrastructure security
• Business continuity services
• Branch office operations and integration

The two companies plan to develop an integrated managed services program to target enterprise businesses that are adding locations, extending IT and telecom services to branch offices, upgrading to newer Internet Protocol (IP) technologies, supporting new software applications, or seeking lower or more predictable overall network and IT costs.

"This alliance positions the SBC companies and HP to offer seamless, end-to-end IT and telecom solutions and a single point of contact approach that we think many of our respective enterprise customers will find appealing," said Mark Keiffer, senior vice president, SBC Business Marketing. "We are excited to work together with HP to create new opportunities to market each other's products and services."

"As voice and data converge, enterprises face increasing complexity - and opportunity. HP and SBC companies, working together, can help enterprises embrace change - and open the door to very tangible business benefits," said ML Krakauer, vice president and general manager, Technology Services - Americas, HP. "HP and SBC companies, with our combined expertise and a proven managed service approach, can help enterprises reduce cost and risk, accelerate solution implementation, realize better return on IT investments, and most importantly, enable them to focus on their core business objectives -- serving customers and growing the business."

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended Oct. 31, 2004, HP revenue totaled $79.9 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

About the SBC Family of Companies

SBC Communications Inc. is a Fortune 50 company whose subsidiaries, operating under the SBC brand, provide a full range of voice, data, networking, e-business, directory publishing and advertising, and related services to businesses, consumers and other telecommunications providers. SBC holds a 60 percent ownership interest in Cingular Wireless, which serves more than 46 million wireless customers. SBC companies provide high-speed DSL Internet access lines to more American consumers than any other provider and are among the nation's leading providers of Internet services. SBC companies also now offer satellite TV service. Additional information about SBC and SBC products and services is available at http://www.sbc.com.

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.