Analyst Report: Itanium Servers Poised for Strong Growth, Customer Satisfaction is High

PALO ALTO, Calif., Feb.17, 2006, A new report from industry analyst firm IDC said that the Intel® Itanium® processor-based server market is entering a strong growth phase.(1)

Based on interviews with 501 members of IDC’s Enterprise Server Customer Panel, the report cites high customer satisfaction and solid intent-to-purchase ratings for Itanium-based servers. In addition, more than two-thirds of HP PA-RISC server customers interviewed plan to migrate to Itanium.

According to IDC, the market for Itanium-based servers will grow to approximately $6.6 billion by 2009. Over the next five years, the compound annual growth rate for Itanium-based servers is expected to be 35 percent, compared to 3.4 percent for the overall server market.

HP Integrity servers are the No. 1 Itanium-based server platform in the industry, and HP had more than $1.6 billion in sales of HP Integrity server-related solutions in fiscal year 2005.

“IDC’s research revealed positive attitudes in the marketplace regarding the Itanium platform, specifically around awareness, purchase intent and current customer satisfaction among IDC’s Enterprise Server Customer Panel,” said Matthew Eastwood, program vice president, Enterprise Server Research, IDC. “Strong perception and awareness is a testament to the brand that Intel and HP have established. This foundation provides a solid basis for the Itanium Solutions Alliance to build broader understanding among IT buyers and encourage new customers and new partners to join the ecosystem.”

The report indicates that the formation of the Itanium Solutions Alliance and the recent commitment by the alliance’s founding members to invest $10 billion in developing the Itanium platform will be “significant elements” in future Itanium adoption by customers.(2)

The report also notes that Itanium is more clearly positioned as a solution for mission-critical applications such as enterprise resource planning, customer relationship management and business intelligence.

“The results of this timely customer research from IDC thoroughly support our long-term commitment to serving the general RISC replacement, mainframe alternative and high-performance computing markets with HP Integrity servers,” said Rich Marcello, senior vice president and general manager, Business Critical Servers, HP. “HP’s solutions approach, coupled with the flexible capacity, secured availability and simplified management of HP Integrity servers, is helping our customers achieve a better return on their IT investments and greater overall satisfaction.”

More information about HP Integrity servers is available at http://www.hp.com/products1/servers/integrity.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company’s offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended Jan. 31, 2006, HP revenue totaled $87.9 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

(1) “Customer Perceptions on the Future of Itanium,” IDC #34842, January 2006.

(2) The panel is composed of U.S. IT directors and managers across the nation that have server buying responsibility within their organizations.

Intel and Itanium are registered trademarks of Intel Corp. or its subsidiaries in the United States and other countries.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever 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 and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services 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 fiscal year ended Oct. 31, 2005 and other reports filed after such report. HP assumes no obligation and does not intend to update these forward-looking statements.

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