Press Release: September 24, 2003

HP First Major Vendor to Indemnify Linux Customers

World's Leading Linux Vendor Offers Customers Indemnification, "Real World" Linux
PALO ALTO, Calif., Sept. 24, 2003

The following is a statement issued to the media by Martin Fink, vice president of Linux, HP Enterprise Servers and Storage:

"Demonstrating its leadership and commitment to Linux, HP is the first major Linux hardware vendor to offer certain Linux customers indemnification from lawsuits relating to SCO and alleged copyright and other intellectual property infringements within Linux.

"HP has not signed any Linux agreement with SCO; this offer is about accountability and protecting the customer while other vendors sit on the sidelines. HP will bear the potential legal responsibility for these customers that implement Linux on HP's platforms. HP has conducted thorough due diligence into this matter; we will offer indemnification to customers who purchase a Linux solution directly from HP with a standard support contract - having not made modifications to the Linux source code - after Oct. 1, 2003.

"Linux is gaining momentum with HP's customers and continues to play an integral role in the HP Adaptive Enterprise strategy and HP's industry-standard offerings. In general, we have not found that customers are particularly worried about the long-term viability of Linux or concern with a potential lawsuit; even still, HP developed this indemnification to address enterprises' concerns and mitigate their risk of choosing Linux.

"HP has not signed a Linux indemnification agreement with SCO and has not exchanged monies for this indemnification; the terms will be communicated to the appropriate parties, including our Linux customers. HP is also not at liberty to speculate as to the outcome of the lawsuit - the courts will decide the outcome while we continue to service the needs of current and future customers.

"At HP the customer is No. 1, which is why HP is offering customers indemnification and the peace of mind to freely use Linux to support business-critical applications and services without legal ramifications. This demonstrates that HP is truly responsible for innovation and unwavering in our commitment to be accountable to customers and the Linux community. HP works in concert with customers to get them the best return on IT through Linux and the open source community to take a stand against unnecessary litigation.

"The future of Linux has never been brighter and HP is leading the way. The company is building on market share leadership, over $2 billion in Linux-related revenue in 2002, and a comprehensive portfolio of industry-standard Linux-based hardware, software and professional services. By giving the green light to customers to move forward on their Linux deployments, HP is driving Linux deeper into the enterprise."

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.

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