Press Release: October 01, 2007

HP Closes Neoware Acquisition

PALO ALTO, Calif. -- HP today announced that it has completed itsacquisition of Neoware Inc., a provider of thin client computingand virtualization solutions, at a fully diluted, enterprise value(net of cash) basis of approximately $214 million.

With the acquisition ofKing of Prussia, Pa.-based Neoware, HP plans to use the best ofboth companies’ technologies to create thin clients that are easierto deploy, more secure and more affordable. The deal will alsoextend HP’s regional sales reach.

Thin clients provide ahigher level of security, can reduce maintenance costs, and consumeless electricity compared to other desk-based computing productsbecause they contain no local data, no moving parts, utilizelow-power components and connect over a network to remote blade PCsand servers where data processing and storage occurs.

“The integration of Neowarewill enable us to offer the industry’s broadest portfolio of remoteclient solutions that deliver the most secure, reliable and easilymanaged computing infrastructure available today,” said KevinFrost, vice president, Business Desktops, Personal Systems Group,HP. “Our top priority is to ensure that Neoware and HP deliveruncompromised product and business continuity to our combinedcustomers.“

Prior to the acquisition,HP was the worldwide leader in each of the Microsoft Windows® XPe,Windows CE and Linux thin client categories. Acquiring Neoware isexpected to boost HP’s thin-client business in the areas of Linuxsoftware, client virtualization and customization capabilities.

Under the terms of themerger agreement, Neoware stockholders will receive $16.25 for eachshare of Neoware stock that they held at the closing of theacquisition and the company will be integrated into the BusinessDesktop unit of HP’s Personal Systems Group.

Microsoft andWindows are U.S. registered trademarks of Microsoft Corp. Neowareis a trademark of Neoware, Inc.

This news releasecontains forward-looking statements that involve risks,uncertainties and assumptions. If such risks or uncertaintiesmaterialize or such assumptions prove incorrect, the results of HPand its consolidated subsidiaries could differ materially fromthose expressed or implied by such forward-looking statements andassumptions. All statements other than statements of historicalfact are statements that could be deemed forward-lookingstatements, including the expected benefits and costs of thetransaction; management plans relating to the transaction; anystatements of the plans, strategies and objectives of managementfor future operations, including the execution of integrationplans; any statements of expectation or belief; and any statementsof assumptions underlying any of the foregoing. Risks,uncertainties and assumptions include the possibility that expectedbenefits may not materialize as expected; that Neoware's businessmay not perform as expected due to transaction-related uncertaintyor other factors; that the parties are unable to successfullyimplement integration strategies; and other risks that aredescribed in HP's and Neoware's Securities and Exchange Commissionreports, including but not limited to the risks described in HP'sQuarterly Report on Form 10-Q for the fiscal quarter ended July 31,2007 and Neoware's Quarterly Report on Form 10-Q for the fiscalquarter ended June 30 2007. HP assumes no obligation and does notintend to update these forward-looking statements.

© 2007Hewlett-Packard Development Company, L.P. The information containedherein is subject to change without notice. HP shall not be liablefor technical or editorial errors or omissions containedherein.

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