Press Release:

HP Records More Than $2.5 Billion in Linux-based Revenue in 2003, Announces New Industry-standard Enterprise Offerings for 2004

PALO ALTO, Calif., Jan. 15, 2004

HP (NYSE:HPQ) today announced record-setting Linux-based revenue in excess of $2.5 billion for its fiscal year 2003 as well as additions to its Linux portfolio, including industry-standard desktop PCs and notebooks running Linux.

Additionally, Video Monitoring Systems is among the many companies turning to HP's industry-standard Linux offerings to help maximize their return on investment and displace costly proprietary hardware for important enterprise applications.

"2003 was a banner year for Linux at HP - our Linux services and solutions business grew at 40 percent, we became the first major Linux vendor to initiate a Linux Indemnity program for customers, we are working with many new enterprise customers and we made over $2.5 billion in revenue for the year," said Martin Fink, vice president, Linux, HP. "We have established HP as one of the world's preeminent Linux vendors and we anticipate continued growth in 2004, led by our dedication to meeting customer needs, industry-standard Linux platform leadership, a broad services portfolio, and innovation such as Linux on notebooks and desktops."(1)

HP Linux: Over $2.5 billion strong

According to IDC's "Q3 '03 Quarterly Server Tracker," HP held the No. 1 position in the rapidly expanding Linux server market in the third quarter of 2003 with 28.1 percent of Linux server factory revenue worldwide. During the same period, HP ProLiant servers also led the market for Linux x86/IA-32 server unit shipments with 27.4 percent of worldwide market share, and HP Itanium-based (EPIC-based) Linux servers led the market for EPIC-based Linux server unit shipments with 66.7 percent of worldwide market share. The size of the Linux server market for this period was $743 million in revenue.(2)

"Linux server revenues and unit shipments have been accelerating in recent quarters, with 49.8 percent revenue growth for Linux servers in Q303, compared to Q302," said Jean S. Bozman, research vice president, IDC's worldwide server group. "The key drivers for this acceleration, we believe, are widespread acceptance of Linux servers for many Web-centric applications, a growing use for file/print and other IT infrastructure workloads, and increasing use of Linux servers for high-performance computing workloads, for custom applications and for packaged ISV applications. HP remains a key player in a highly competitive marketplace."

New customers demonstrate horizontal adoption of Linux

Video Monitoring Systems (VMS) is a world leader in news and advertising information retrieval, providing unique services and products for thousands of public relations firms, advertising agencies, marketers, event sponsors and producers worldwide.

VMS turned to an HP Linux solution to save on licensing and information technology costs and help the company keep pace with its rapidly growing business. HP ProLiant servers running Linux provide VMS the flexibility, scalability and high performance the company needed for its 24x7 always-on environment.

"HP and Logicalis quickly delivered a Linux solution that was substantially less expensive than the Sun Solaris platform and delivered higher quality and far better performance than the Dell systems we previously used in our infrastructure," said Gerry Louw, chief information officer, VMS.

New HP solutions deliver Linux for the real world

HP unveiled several new Linux reference architectures, including commercial Linux reference architectures based on Oracle Database/9iRAC and BEA WebLogic Server and an open source reference infrastructure architecture based on open-source software from MySQL, JBoss, Apache and OpenLDAP.

The Linux reference architectures are being deployed on industry-standard HP ProLiant servers, to be followed by deployment on HP Integrity servers. These solutions are tailored to enterprise customers migrating from Solaris, AIX and Tru64 to save them time and money.

The solutions help mitigate business risk for customers and improve the support for mission-critical deployments. HP is the first major Linux vendor to offer these types of commercial applications not from a proprietary, single-source; the solutions were created by integrating applications based on open source software and the systems expertise of HP.

HP also announced updates regarding Linux notebooks and desktops:

The new HP Compaq t5300 and t5500 diskless workstations are designed for seamless use with the Linux Terminal Server Project (LTSP). HP has collaborated with the LTSP team and to market high-performance, standards-based thin clients. HP thin clients feature fast Transmeta central processing units and high-resolution ATI Rage XC video to provide superb thin client performance. The new HP thin clients come standard with a three-year limited hardware warranty. The HP Compaq t5300 is priced at $299 and the t5500 is priced at $349.(3)

In addition, HP has certified several models from its business notebook line on SuSE Linux Desktop. These models include the HP Compaq nc6000, nc8000 and nw8000. Unveiled in October 2003, these notebooks certified with SuSE Linux are now available worldwide. Additionally, HP has certified its HP Compaq business desktop D530 and D330 PCs with SuSE Enterprise Linux.

HP continues to enable enterprise capabilities for Linux on Integrity servers by extending its high-availability solution to 64-bit Linux environments with HP Serviceguard for Linux for Integrity servers. This high-availability clustering software meets customers' demand for efficient, continuous access to critical applications and information, offering complementary mission-critical support and services as well as disaster tolerance capability through integration with HP StorageWorks Cluster Extension.

HP plans to announce the availability of HP Serviceguard Extension for SAP solutions in early February. This software is designed to simplify the integration of large SAP solution environments while offering high availability with world-class support to deliver a standardized, consistent solution backed by both HP and SAP.

HP at LinuxWorld

HP executives, customers and partners will be on hand at LinuxWorld in New York, Jan. 21-23, in booth 723, where HP's Linux-based products and services will be available for demonstration.

Martin Fink will be hosting a book signing for his book, "The Business and Economics of Linux and Open Source." Planned demonstrations include Linux-based print drivers, HP ProLiant blade servers, HP Integrity servers, porting and migration services, high-availability Linux clusters and HP Systems Insight Manager software.

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 the fiscal year ending on Oct. 31, 2003, HP revenue totaled $73.1 billion. More information about HP is available at

(1) This release is not an offer of indemnity. Eligibility for qualifying customers only. The indemnity program requires customers to sign an indemnity agreement that outlines the covered claims, rights and responsibilities of HP and customers. More details are available at HP reserves the right to modify or cancel the indemnity program at any time.

(2) IDC Worldwide Quarterly Server Tracker August 2003, based on factory revenue.

(3) Actual prices may vary.

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