News release

HP Moves into Tie for No. 1 Market Share Position in Worldwide Server Revenue

HP outships all vendors for 12th straight quarter, growing worldwide server unit market share

Driven by faster-than-market growth, HP shared the No. 1 position in worldwide server revenue and continued its No. 1 position in worldwide server shipments for the 12th consecutive quarter, according to first quarter 2005 figures released today by IDC⁽¹⁾.

HP moved to the shared No. 1 spot in worldwide server revenue⁽²⁾ market share by growing 0.9 percentage points year over year, while IBM declined 1.4 percentage points.

In significant growth segments, HP outpaced the market year over year in units and revenue in x86, blade and Intel® Itanium® 2 (EPIC)-based servers. Additionally, HP holds a No.1 position in revenue in each of the three major operating systems, Windows, Linux and UNIX®, which together comprise nearly 95 percent of all servers shipped.

"Our strong momentum in servers across the board demonstrates that our standards-based strategy and focused innovation are resonating with customers and translating into market share gains at the expense of competitors," said Mark Hudson, vice president, Marketing, Enterprise Storage and Servers, HP. "In key high-growth segments, we expect to continue our solid growth by delivering more choice and value throughout our portfolio."

Other highlights of the analyst firm's report include:

• In the x86 market, where HP ProLiant servers have led the market for 35 consecutive quarters – nearly nine years – HP extended its No. 1 position in units and revenue, growing faster than the market year over year with double-digit growth.
• In x86 blade servers, HP more than doubled its revenue year over year, gaining share faster than IBM in units and in revenue both worldwide and in the United States. Together, HP and IBM represent 74 percent revenue share, while Dell is a distant third with 9.7 percent.
• HP's strategy of providing customer choice in x86-64-based servers delivered the No. 1 position for HP in units and revenue. HP leads this market in both AMD Opteron™ and Intel Xeon™-based systems.
• In Itanium 2 servers, HP outgrew the market in units and revenue, nearly doubling revenue year over year.
• HP secured the No. 1 position in total UNIX server revenue, being the only top 3 vendor to grow high-end UNIX revenue – posting double-digit growth. HP held the No. 1 position in Windows units and revenue, growing faster than the market year over year and taking market share from competitors. HP maintained its No. 1 spot in the Linux server market with 33.6 percent growth in units year over year and 29.8 percent year-over-year growth in revenue.

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 April 30, 2005, HP revenue totaled $83.3 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at www.hp.com.

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

⁽²⁾ Factory revenue according to IDC's Worldwide Quarterly Server Tracker, May 2005.