News release

HP Listed in "Leaders" Quadrant in Data Center Outsourcing Report

HP today announced that it has been listed in the "Leaders" quadrant of industry analyst firm Gartner Inc.'s 2005 evaluation of data center outsourcing service providers in North America.⁽¹⁾

Gartner's Magic Quadrant report evaluates vendors on their ability to execute - which includes service and support, market share and financial health, among other criteria - as well as their completeness of vision, which includes breadth and functionality of offerings, successful implementations and ability to meet customer requirements now and in the future.

According to Gartner, Leaders for the data center outsourcing quadrant demonstrated significant depth and breadth of experience and an understanding of the dynamics needed to successfully deliver services.

In March, HP was listed in the "Leaders" quadrant in the Gartner Magic Quadrant for data center outsourcing in Western Europe.⁽²⁾

"We are very pleased to be positioned in the leader quadrant by Gartner in the data center outsourcing industry," said Steve Smith, senior vice president, HP Services. "As data center outsourcing is often the cornerstone of IT outsourcing deals, and as data privacy, security and compliance issues often determine how comfortable clients are in outsourcing their data centers, we feel this news further reinforces our position as a top-tier outsourcing provider."

HP provides selective and comprehensive capabilities for strategic outsourcing, operations management and support to run and evolve a mission-critical IT infrastructure. HP's capabilities and expertise in managing complex, multi-vendor and heterogeneous global IT environments often include taking on customers' employees as well as IT assets and operations.

HP has also expanded into the area of business process outsourcing and provides an extensive range of services that span all core finance and administration processes. HP optimizes infrastructure, applications and business processes as part of its business process outsourcing capabilities to add value for its clients.

Overall, HP's outsourcing business is the fastest growing segment within HP, with growth up 27 percent in the second quarter of 2005. Outpacing the market by nearly a factor of three, this marks the ninth consecutive quarter of double-digit growth for the division and represents wins across key market industries, including public sector, telecommunications, financial services and manufacturing.

More information on HP outsourcing is available at http://www.hp.com/go/outsourcing.

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 http://www.hp.com.

⁽¹⁾ Gartner Research "Magic Quadrant for Data Center Outsourcing, 2005" by R. T. Matlus, W. Maurer. June 22, 2005.

⁽²⁾ Gartner Research "Magic Quadrant for Data Center Outsourcing in Western Europe, 4Q04" by G. Tramacere, C. Da Rold. March 1, 2005.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could 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 fiscal quarter ended Jan. 31, 2005, and other reports filed after 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.

The Magic Quadrant is copyrighted June 23, 2005, by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.