News release

Latest Analyst Figures Mark 10 Years of Market Leadership for HP in x86 Servers

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According to second quarter 2006 figures released today by IDC,⁽¹⁾ HP has maintained its 10-year lead in the x86 server market⁽²⁾ by earning 34.5 percent factory revenue share for the period.

HP also retained its No. 1 position in total worldwide server unit shipments, outshipping all other major vendors in the worldwide server market for the 17th consecutive quarter. HP took the No. 2 spot for total server factory revenue with 27.8 percent of the market.

In addition to its lead in x86 servers, HP continued to be No. 1 in total worldwide factory revenue and units for the x86-64, AMD Opteron™ and Intel Itanium®-based server markets. HP also led in all three of the major operating systems combined – Windows®, Linux and UNIX® – which comprise more than 96 percent of all servers shipped worldwide.

“Not only has HP led the world in industry-standard servers for the last 10 years, but we’ve also had strong growth in important emerging markets like blades, Integrity and Linux,” said Mark Hudson, vice president of marketing, Enterprise Storage and Servers, HP. “This confirms that our ongoing investments will enable us to continue to lead in delivering value to our customers.”

Highlights of the analyst firm’s worldwide report include:

• This quarter marks the 40th consecutive quarter of x86 server market share leadership for the HP ProLiant server family in both factory revenue and units⁽²⁾;
• HP maintained the No. 1 vendor ranking worldwide with 30.5 percent total server shipment share growing 12 percent year-over-year, outgrowing the nearest two competitors;
• HP maintains a No. 1 position in the high-end UNIX server factory revenue worldwide, in a statistical tie. It also grew Linux server units by 32.7 percent year-over-year, significantly faster than the market in units and factory revenue, gaining 5 percentage points of unit market share;
• HP tied for the No. 1 position in blade server factory revenue and grew faster than competitors with 46.3 percent year-over-year growth while gaining market share. These results were achieved even before HP’s powerful new, c-Class blades started volume shipments in the current calendar quarter;
• HP Integrity servers, using the Intel Itanium 2 processor, maintained their No. 1 position in both factory revenue and units, growing 58.2 percent in factory revenue year-over-year;
• In the rapidly growing x86-64 based server segment, HP was No. 1 in factory revenue and units shipped, with year-over-year unit shipment growth of 49.1 percent. This includes both AMD Opteron™ and Intel® x86-64 Xeon™-based servers.
• HP gained more than 12 percentage points market share in AMD Opteron processor-based server factory revenue; the AMD Opteron processor accounted for 20.2 percent of all worldwide x86 server revenue in the period. HP remains the leading provider of AMD Opteron processor-based servers and server blades, with a commanding 46.1 percent of factory revenue share.

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 July 31, 2006, HP revenue totaled $90.0 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

¹ IDC, Q206 Worldwide Quarterly Server Tracker, August 2006.

² Includes Compaq ProLiant from Q196 through Q202 and HP ProLiant from Q302 through Q206.

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

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 but not limited to statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products and services; anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the achievement of expected results and other risks that are described from time to time in HP’s Securities and Exchange Commission reports, including but not limited to the risks described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2006, and other reports filed after HP’s Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2005. HP assumes no obligation and does not intend to update these forward-looking statements.

© 2006 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.