Press Release:

HP Sets Sights on SMB Customers with New Low-cost Server

Strengthens Relationships with Resellers to Deliver Powerful Technology and Support
PALO ALTO, Calif., March 17, 2003

HP (NYSE:HPQ) today introduced for small- to medium-sized businesses (SMBs) the HP Server tc2120 -- an ideal server for budget-conscious businesses requiring dependable performance.

The server is the latest in the tc2100 series, which offers exceptional value to the SMB market and cost-sensitive corporations. In addition, these servers provide a compelling infrastructure solution for value-added resellers (VARs).

"The new tc2120 server was specifically designed to address the needs of our most value-conscious customers who demand simple setup, dependable performance and excellent service and support," said James Mouton, vice president, platform division, HP Industry Standard Servers. "The tc2100 series servers are prominent in our industry-standard server portfolio, with strong sales and high customer satisfaction."

The HP Server tc2120 simplifies management tasks and easily adapts to changing computing demands. The new server also is an optimal platform for VARs, allowing them to extend the service offerings desired by their customers with world-class support from HP.

As customers' computing needs grow, HP provides a simple, cost-effective transition from tc2100 series servers to the robust industry-standard HP ProLiant ML300 server family. The ML300 series offers expanding SMBs additional performance capabilities, such as support for remote lights-out management and Smart Array controllers.

In December 2002 AMI-Partners, a global research firm specializing in SMB technology trends, forecast that worldwide IT and telephony spending by SMBs will grow by 7 percent in 2003, compared with consensus estimates ranging from below zero to 4 percent for the expected growth in IT and telecom spending by larger enterprises.(1) Additionally, according to recent analyst reports, HP was the world's leading supplier of PCs to the SMB industry in the fourth quarter of calendar year 2002.(2)

"HP and its network of value added resellers deliver the tc2100 and the ProLiant ML300 series servers to growing businesses that need reliable business tools to handle intelligent computing tasks such as managing files, sharing printers, hosting a Web site or database management," said Robyn West, vice president of small and medium business, HP Personal Systems Group. "These quality and affordable business tools increase productivity and allow customers to focus on operating their business more efficiently and competitively in today's challenging economic environment."

Banking on HP Solutions

Having recently completed an initial public offering and local bank acquisition, SBU Bank -- a Partners Trust company -- attributes technology to its ability to compete as a publicly traded company.

"As a 350-employee organization with 16 branches serving the diverse financial services needs of thousands of customers in central New York, we rely on technology solutions from HP to maximize efficiency and productivity," said Jerry Burke, vice president of information technology, SBU Bank. "Quality and reliable solutions from HP are critical to our ability to grow our business and deliver consistent service to our customers, including supporting their need to conduct online banking conveniently and securely over the Internet."

HP's adaptive infrastructure strategy is designed to adapt IT requirements to the demands of individual customers as their business needs change. As a result of this strategy, SMB customers can integrate powerful HP servers such as the tc2100 and ProLiant ML300 series into their IT infrastructures while business continues to operate uninterrupted, even in times of unpredictability.

"SBU Bank is a great example of how fast-track companies are using servers along with other HP brand IT solutions to have a predictable platform that allows them to build and grow their business," said Rob Ward, account executive, Express Systems Integration, Inc., one of the largest computer network integration providers in the central New York. "As an HP partner, we currently provide SBU Bank with on-site IT service and support. We are confident in offering these solutions to our customers because of the reliable technologies and expert support from HP."

The tc2120 server provides customers the choice of various operating systems, including Microsoft® BackOffice Small Business Server 2000, Microsoft Windows® 2000 Server and the forthcoming Microsoft Windows Server 2003 releases, in addition to Red Hat Enterprise Linux AS, SuSE Linux and Novell NetWare.

Available immediately, the HP Server tc2120 has estimated U.S. pricing starting at $549.(3) Additional information about the product is available at

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its acquisition of Compaq Computer Corporation on May 3, 2002. More information about HP is available at

(1) AMI-Partners, Inc. news release: "IT Security, Storage, Enterprise Type Applications and Enterprise Solutions Lead the Top Ten IT Trends among Global SMBs in 2003," Dec. 16, 2002.

(2) IDC Worldwide Quarterly PC Tracker, March 3, 2003. For yearly comparisons, HP and Compaq data is combined.

(3) Actual prices may vary.

Microsoft and Windows are U.S. registered trademarks of Microsoft Corp.

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 Securities and Exchange Commission reports, including but not limited to HP's annual report on Form 10-K for the year ended October 31, 2002, as filed with the Securities and Exchange Commission on January 21, 2003, and subsequently filed reports. 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 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