News release

HP Again No. 1 in Overall Server Shipments, Grows Faster than Market, Including in Blades

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HP outshipped all other major vendors in the worldwide server market for the 18th consecutive quarter, according to third quarter 2006 figures released today by IDC.⁽¹⁾

HP surpassed market growth in the worldwide blade server market, with 43.8 percent year-over-year factory revenue growth. HP also grew faster than the market in units shipped in blades and, with 35 percent revenue market share, had more than three times that of the third-ranked competitor.

In the high-performance computing market, HP was No. 1 in revenue, with a 34.5 percent market share, and outgrew the market in revenue and shipments. HP beat industry growth in revenues by nearly two times with 13.2 percent quarter-over-quarter growth, and it grew units shipped by 5.7 percent versus a virtually flat total market.⁽²⁾

“The balanced performance in both units shipped and revenue illustrates HP’s continued strength across the board in the worldwide server market,” said Mark Hudson, vice president of marketing, Enterprise Storage and Servers, HP. “Customers can feel confident partnering with HP as we continue to demonstrate our value today and moving forward.”

Highlights of the analyst firm’s worldwide report include:

• HP maintained the No. 1 vendor ranking worldwide with 28.8 percent total server shipment share, and unit shipments grew faster than the market;
• HP continued its leadership in the x86 server market, extending its lead to 33.1 percent factory revenue share, and was again No.1 in units shipped. This marks 41 consecutive quarters of market leadership for HP ProLiant servers in the x86 server market⁽³⁾;
• In the highly competitive AMD Opteron™ processor-based server market, HP continued to grow both factory revenue and units, increasing factory revenue share to 47 percent. HP also leads in the 64-bit Intel® Xeon™ processor-based (X/EM64T) server market with 32.3 percent factory revenue market share, growing revenue 12.1 percent year-over-year;
• HP was No. 1 in combined Windows®, Linux and UNIX® server revenue, with the three operating systems accounting for more than 96 percent of all servers shipped worldwide;
• Furthering its lead in the Linux market, HP gained nearly 6 percentage points of factory revenue market share in the Linux server segment and grew significantly faster than the market in revenue, with 28.2 percent year-over-year growth;
• In the EPIC/Itanium® market segment, HP continued to rank No. 1 in both factory revenue and units, growing 39.6 percent in factory revenue year-over-year;
• HP maintained the No. 1 position in worldwide high-end UNIX server factory revenue and also gained market share from competitors in the volume UNIX segment in both units and revenue.

More information about HP servers is available at www.hp.com/go/servers.

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, 2006, HP revenue totaled $91.7 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

⁽¹⁾ IDC, Q306 Worldwide Quarterly Server Tracker, November 2006.

⁽²⁾ IDC, Worldwide Server QView Q3 2006, November 2006.

⁽³⁾ Includes Compaq ProLiant from Q196 through Q202 and HP ProLiant from Q302 through Q306.

AMD and Opteron are trademarks of Advanced Micro Devices, Inc. Intel, Xeon and Itanium 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.

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 July 31, 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.