Press Release: September 25, 2003

HP Adaptive Enterprise Strategy Delivers Cost and Agility Benefits to Philips' Semiconductor Division

HP Utility Data Center, on track for significant cost reduction, improves service delivery and increases business agility
PALO ALTO, Calif., Sept. 25, 2003

Building on the HP Adaptive Enterprise strategy to tighten the linkage between business and IT, HP (NYSE:HPQ) and Philips' semiconductor division have deployed an HP Utility Data Center (UDC) delivering a fully virtualized data center that reduces information technology (IT) costs and enables an IT infrastructure that responds in real time to market changes.

The deployment brings Philips' plans for a flexible IT infrastructure and low-cost data center management to life - allowing for greater speed and business agility that is essential for competing in the highly volatile semiconductor industry.

The HP UDC is now up and running at Philips Semiconductors' largest site in Nijmegen, the Netherlands. The HP UDC at Philips is managed from a single console where server and storage resources can be allocated virtually, within minutes, instead of having to physically re-wire the desired hardware. In addition to the savings from infrastructure deployment and operational costs, Philips also leveraged previous IT investments by using existing servers in its new HP UDC solution.

"The HP UDC allows us to quickly and easily adapt to the business fluctuations of the semiconductor industry," said Theo Smit, director, information and communications technology, Philips Semiconductors Nijmegen. "We reduce our total cost of ownership by streamlining data center management and reducing excess IT capacity while also incorporating the industry's best platform for data center consolidation."

In addition to deploying the HP UDC, Philips Semiconductors Nijmegen further enhanced its IT organization, creating a highly professional environment. This was achieved by implementing operational processes to manage IT as a service, based on HP's IT Service Management methodology, and by deploying HP OpenView management software. Adding to the flexibility of the IT infrastructure, Philips and HP also are working on the implementation of a pay-per-use storage environment.

"This new IT infrastructure at Philips semiconductor division in Nijmegen, including the virtualization capabilities of the HP UDC, reflects the real-world application and benefits of the HP Adaptive Enterprise strategy," said Nora Denzel, senior vice president, HP Adaptive Enterprise. "HP was able to offer solutions and technologies to help meet Philips' goals of building a more flexible IT infrastructure."

At Philips' semiconductor division, the HP UDC enables rapid reconfiguration of servers and storage in response to the ever-changing needs of several applications. Expansion to other production services is planned by the end of this year.

"As the HP Adaptive Enterprise strategy matures in the marketplace, sophisticated enterprises like Philips will take advantage of solutions such as the HP UDC that enable increased competitive value and cost benefits," said Vernon Turner, group vice president, global enterprise server solutions, IDC.

The HP UDC solution permits Philips' data center infrastructure to be provisioned virtually and managed on the fly - giving Philips the ability to deploy new applications and services rapidly and to establish flexible usage-based billing.

Based on open standards, the HP UDC can accommodate new and existing servers, storage and network equipment from HP and other vendors, enabling customers to make the transition from their legacy environments to HP's flexible utility data center architecture.

HP and Philips' semiconductor division have a long-standing customer relationship. In September 2001, HP began assisting Philips with the development of blueprints for the management of data centers at minimum cost - a prerequisite for a utility computing strategy.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing for consumers, enterprises and small and medium businesses. For the last four quarters, HP revenue totaled $71.3 billion. More information about HP is available at

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development and performance of these products and services may not proceed as planned; and other risks that are described from time to time in HP's Quarterly Report on Form 10-Q for the period ended July 31, 2003 and HP's other Securities and Exchange Commission reports filed after HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2002. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation and does not intend to update these forward-looking statements.

About HP

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and services, we engineer experiences that amaze. More information about HP Inc. is available at