News release

HP Lands No. 1 Position in Worldwide Server Shipments for 11th Consecutive Quarter

Company's growth driven by increase in x86, x86-64 and Itanium 2 shipments and revenue, with continued leadership in Windows, Linux and UNIX in 2004

HP closed out 2004 as the leader in worldwide server shipments for the 11th consecutive quarter, according to fourth quarter 2004 figures released today by IDC.⁽¹⁾

HP's leadership was fueled by a strong quarter for HP ProLiant systems in the x86 market, a sector the company has led for the last 11 quarters. HP increased its shipments by 19.1 percent and its revenue by 13.8 percent year over year.

In addition to these gains, achieved at the expense of competitors, HP grew share in unit shipments and was the No. 1 vendor in x86-64 platforms for 2004, a segment in which it saw sequential shipment growth of 176.2 percent and 195.9 percent in quarter-over-quarter revenue.

Furthermore, for Intel® Itanium® 2-based HP Integrity servers, the company experienced calendar year-over-year gains of 61.6 percent in units shipped and 245.8 percent in revenue.

"The numbers show that HP is pulling ahead of competitors in high-growth markets," said Paul Miller, vice president, Marketing, Industry Standard Servers, HP. "We ended 2004 capturing nearly a third of the revenue in the high-volume x86 space. Competitors who remain unable to add any differentiated value to their servers struggled, reinforcing that HP's strategy of innovating on standards-based, high-volume architectures is bearing fruit."

Additionally, HP is again the leader across all three major operating systems combined (Windows®, Linux and UNIX®), with sequential growth in shipments of 15.4 percent and revenue of 19.9 percent.⁽¹⁾ Offering customers a choice of operating systems and platforms that are based on industry standards is critical to HP's server strategy for enterprises of all sizes.

Other highlights of the analyst firm's report include:

• HP led the worldwide Intel Itanium 2-based server segment in 2004 in revenues and units. HP Integrity servers grew 61.6 percent in units and 245.8 percent in revenue year over year.



• In the high-growth industry-standard x86-64 (Intel Xeon™ EM64T, AMD Opteron™) server market, HP was No. 1 in units and revenue in 2004, with 176.2 percent sequential growth in units shipped and 195.9 percent in sequential revenue. HP was the leading vendor in 2004 to offer x86-64 servers based on both architectures for customer choice.



• HP continued to lead the fast-growing worldwide Linux server market in 2004 in units, with 30.4 percent growth in units and 39 percent growth in revenue year over year.



• HP continued its leadership in Windows server shipments in 2004 with 25 percent unit growth and 18.9 percent growth in revenue year over year.



• Demonstrating the sustained strength of the company's multi-operating system strategy, HP led in revenue in 2004 in each of the three major operating environments - Windows, Linux and UNIX.

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 Jan. 31, 2005, HP revenue totaled $81.8 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

⁽¹⁾ Source: IDC's Worldwide Quarterly Server Tracker, February 2005.

Intel, Itanium and Xeon are trademarks or registered trademarks of Intel Corp. or its subsidiaries in the United States and other countries. Windows is a U.S. registered trademark of Microsoft Corp. UNIX is a registered trademark of The Open Group. Linux is a U.S. registered trademark of Linus Torvalds. AMD Opteron is a trademark of Advanced Micro Devices, Inc.

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 Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2004. HP assumes no obligation and does not intend to update these forward-looking statements.