Press Release:

HP Goes to Head of the Class with More Than $100 Million in New Education Sales

When school bells ring to start the fall term this year, students will notice more than just new teachers at the head of the class -- they'll be seeing more PCs and other products from HP than ever before. With school districts and colleges throughout the United States and Canada making significant IT purchases in recent weeks, HP (NYSE:HPQ) today announced more than 40 new education contracts -- each valued at more than $1 million -- which together represent more than $100 million in new business.

"Today HP has the most impressive line of products and services in its history, and our product roadmap provides customers much more clarity than any of our competitors," said Jim Milton, senior vice president, HP Enterprise Systems Group, and managing director, HP Americas. "We're experiencing solid growth in the education market beyond what we projected prior to the merger. School districts and colleges are looking at HP and obviously liking what they're seeing, turning this into a strong back-to-school season for us."

Nearly two out of three of all U.S. education agreements awarded to HP in the past three months were competitive wins against Dell and IBM. The recent deals, many of which are multi-year agreements, were signed by school districts and universities representing 22 states and two Canadian provinces.

"Industry leading technology and services, combined with an intense focus on putting the customer first, are giving HP an edge in the education marketplace," said Milton.

HP's educational business encompasses a full array of products and services, including: Compaq Evo notebook and desktop PCs, HP ProLiant and Alpha servers, wireless local area networks, disaster recovery storage area networks, enterprise storage, monitors, printers, HP iPAQ Pocket PCs, as well as outsourcing services.

"In addition to school districts coming to HP for hardware, they are increasingly asking about outsourcing services -- especially security, business continuity and disaster recovery requirements, which they are ill-prepared to deal with," said Jim Weynand, vice president and general manager, HP Public Sector Organization. "Mirroring a trend HP is seeing in private industry, more and more administrators are coming to realize that the management of high-tech infrastructures and help desk services should be left to the high-tech experts. We think it's the way to go because outsourcing relieves schools of their IT worries and allows them to focus on what they do best, which is to educate students."

Even large, tech-savvy companies are realizing the benefits of outsourcing technology services, as evidenced by recent HP contracts with Microsoft and Accenture.

Texas School Districts

Katy Independent School District (ISD), outside Houston, signed a multi-year agreement to have HP manage its complete IT infrastructure and provide 24x7 help desk services. Overall, HP is providing consulting and system integration, customer support and outsourcing services to help Katy ISD design, deploy and manage its IT environments. (See related news release, "School District in Katy, Texas, Awards IT Outsourcing to HP; Purchases Compaq Desktop PCs.")

In addition, in making HP its district standard, Katy ISD so far this year has purchased more than $3 million in HP servers, desktops and notebook PCs, replacing existing hardware from Dell.

"Because the IT network is critical to so many vital functions within Katy ISD, we not only couldn't afford for the system to go down, we couldn't afford for it to run slowly," said Dr. Leonard Merrell, superintendent, Katy ISD. "With the bar set so high, we needed a technology company with the experience and capabilities to keep us up and running at maximum efficiency. HP has the people, the experience and the technology to do this -- and do it at a competitive price."

Prior to its merger with HP this year, Compaq signed a three-year comprehensive technology agreement -- worth more than $120 million if all options are exercised -- with the Houston Independent School District. A key element of that agreement was to enable teachers in the largest school district in Texas to purchase state-of-the-art Compaq Evo N115 notebook PCs for their personal use at significantly discounted prices.

HP also is helping El Paso Community College meet its technology needs. Partnering with Amherst, an HP reseller, HP won a competitive bid over Dell valued at $1.5 million to provide more than 1,500 Compaq Evo desktop PCs and monitors for use in the college's labs at five school campuses. Discussions also are underway to create an employee/student purchase program.

Georgia Public Schools

Fifteen school districts in the State of Georgia recently purchased more than $15 million in equipment and services from HP. Collectively, the districts are deploying more than 12,000 pieces of new equipment, including desktop and notebook PCs, servers, storage devices, switches and printers. The installations include a variety of HP services. (See related news release, "HP Goes 'Back to School' in a Big Way in Georgia School Districts.")

Some of the new HP contracts in Georgia include delivering:

  • improved classroom Internet access and additional wireless computer labs for the Troup County School System;
  • more than 3,000 desktop and notebook PCs, 60 wireless PC carts and HP iPAQ Pocket PC units -- for Houston County Schools;
  • HP StorageWorks systems at more than 90 sites in the Atlanta Public Schools to manage data such as attendance and grade records;
  • advanced Compaq Evo notebook PCs to the Clarke County School District to give teachers greater flexibility in applying technology both inside and outside the classroom; and
  • Compaq Evo D500 desktop PCs and 12 wireless notebook carts -- each with 10 Evo notebook PCs -- to support student-centered learning in two new elementary schools being opened by Forsyth County Schools.
Anne Arundel County, Maryland, Public Schools

Anne Arundel County Public Schools, the fifth largest public school system in Maryland, is in the second year of a three-year contract with HP to develop a uniform PC technology platform. The 75,000-student district has spent more than $2 million during 2002 to place more than 4,000 Compaq Evo D500 desktop PCs and 75 HP ProLiant ML370 servers in its117 schools.

The technology upgrade effort is part of the school system's Advanced Schools Automation Project, an ongoing technology plan initiated in 1995. The school system is implementing its strategy by leasing PCs and replacing them in three-year cycles. This approach ensures that no PC in use in the classrooms is more than three years old.

Alexandria, Virginia, Schools

The 11,000 students in the Alexandria, Va., City Public Schools will benefit from the placement of 29 wireless notebook PC carts in their schools. The Compaq Evo 1000v notebook PCs were purchased to support a pilot implementation of an Integrated Learning System at one elementary school, provide an interactive math curriculum at middle and secondary schools, and prepare for on-line administration of the state's Standards of Learning examinations.

Five of the PC carts will be used in the elementary school piloting the Integrated Learning System, and the remainder will be placed in math classrooms at the four middle and high schools in the 18-school district. The units, equipped with extra batteries, will be in continual use throughout the school day and will communicate with the schools' 100 Mbps LANs via 54 Mbps wireless adapters.

Rose-Hulman Institute of Technology

Rose-Hulman Institute of Technology, one of the nation's top undergraduate engineering, science and mathematics colleges, turned to HP when Acer was unable to meet the college's new requirements for notebooks.

Recently, Rose-Hulman signed a $1.3 million agreement with HP for 525 Compaq Evo N800 notebooks. Using HP notebooks, Rose-Hulman's faculty and incoming freshmen will benefit from more powerful video-based education software and enjoy wireless capabilities for enhanced mobility.

Education Wins Across the United States and Canada

Eleven school districts and universities in California, Washington, Utah, Arizona and Nevada have signed agreements, collectively worth nearly $20 million, to purchase a variety of equipment and services from HP. The equipment includes Compaq Evo desktop PCs, displays, portables, monitors, storage and wireless LANs.

Five colleges and universities in the northeast, plus 13 school districts in New Jersey, New Hampshire, Rhode Island, Pennsylvania and Massachusetts have signed contracts with HP worth more than $23 million.

In addition, HP has won a number of major new education contracts in Canada.

"HP Canada offers the most comprehensive array of products and services of any technology company in Canada," said Paul Tsaparis, president and chief executive officer, HP Canada. "We're absolutely committed to working with educators to understand their needs, and HP Canada's success mirrors that commitment."

HP Canada has a workforce of approximately 6,900 at 58 locations, and has an extensive network of dealers and authorized service personnel to help ensure customer satisfaction throughout Canada. Significant new education business for HP Canada includes: the Department of Education of New Brunswick, the Near North District School Board, Thames Valley District School Board and the London Catholic District School Board.

Canada Win Details

The Department of Education of New Brunswick, a largely bilingual province in the Canadian Maritimes, recently invested CDN$2.9 million in the purchase of more than 1,550 Compaq Evo D500 desktop PCs and monitors from HP. Pre-loaded with both English and French software, the PCs were selected to facilitate the department's ability to serve constituents throughout the province in the areas of public (kindergarten through grade 12), post-secondary, adult literacy and distance education. The department also is responsible for managing the province's public libraries and community access centers.

Since launching a three-year "Business Advantage" extranet project developed by HP earlier this year, the Near North District School Board (NNDSB) -- which serves the districts of Nipissing and Parry Sound in the Near North region of Ontario -- has invested more than CDN$1.2 million in computer desktop and server hardware, software and services from HP.

NNDSB selected HP for the contract over the incumbent vendor, Dell, based on HP's proven reputation to deliver affordably priced and technologically advanced multimedia networked desktop PCs, notebooks, servers and peripherals, as well as its ability and willingness to provide continuous online technical and support services through a Web-based extranet customized for the board's specialized needs.

Based in London, Ontario, Thames Valley District School Board (TVDSB) -- the province's third largest school board -- recently purchased an HP AlphaServer ES40 to run its school administration software applications and an EMA 12000 storage system for a storage consolidation strategy. With more than 300 HP ProLiant servers already installed, TVDSB also renewed an agreement with HP to continue to supply it with Intel servers over the next two years. The board also has moved forward with an "HP Only" policy for printer tenders.

Working in collaboration with the Thames Valley District School Board, the London Catholic District School Board issued a two-year vendor of record assignment to HP for desktop PCs, servers, network and printing applications. In winning the deal, estimated in value at CDN$2 million, HP faced competition from IBM, Dell, Cisco and a variety of so-called white box vendors.

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 merger transaction involving Compaq Computer Corp. on May 3, 2002. The company would have had revenue on a combined company basis with Compaq of approximately $81.1 billion in fiscal 2001 and has operations in more than 160 countries. More information about HP is available at

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; 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 quarterly report on Form 10-Q for the quarter ended April 30, 2002 and reports filed subsequent to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001. HP assumes no obligation and does not intend to update these forward-looking statements.

About HP

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