HP Integrity Server Business Shows Strong Growth in Emerging Markets

PALO ALTO, Calif., April 13, 2006, HP today announced 17 customer wins for the HP Integrity server line in the emerging markets of Brazil, Russia, India and China.

The wins contributed to the triple digit year-over-year revenue growth HP saw in the Integrity line in the so-called BRIC countries.(1)

According to industry analyst firm IDC, combined IT spending in BRIC nations is expected to grow at a compound annual growth rate of 13.9 percent and reach more than $100 billion by 2009.(2) HP plans to expand its efforts in these countries as their future IT spending intensifies.

“Customers in emerging markets are building IT infrastructures from scratch, not merely updating or replacing older ones, and HP Integrity servers are the cornerstone of these next-generation data centers,” said Rich Marcello, senior vice president and general manager, Business Critical Servers, HP. “Customers choose Integrity because innovations around flexible capacity, secured availability and simplified management deliver superior return on investment versus competitors’ offerings.”

Bharat Forge Limited of India, the world’s largest forging conglomerate, turned to HP to meet challenges associated with their greatly accelerated business growth. The company is using HP Integrity servers with HP-UX 11i and HP StorageWorks arrays running SAP for production planning, sales, manufacturing and materials management.

“HP supported our business expansion while saving us at least 30 to 40 percent in costs annually through superior system scalability,” said Yogesh Zope, vice president, IT Services, Bharat Forge Limited. “HP’s local Indian presence enhanced their ability to add manufacturing expertise across our value chain.”

Additional HP Integrity customers in India include Astra Motor III (ASMO III, automotive manufacturing/supply chain), ITC Ltd. (consumer products) and Tata Teleservices (telecommunications).

New HP customer engagements in Russia include Avtovaz (auto manufacturing) and The Finance Committee of St. Petersburg, which chose HP to increase the efficiency of budgeting, asset use and securities distribution, as well as to improve the reliability and scalability of custom finance applications. HP helped consolidate its data center and enabled flexible resource allocation through an Adaptive Enterprise architecture and a fault-tolerant configuration.

“We wanted to modernize our information infrastructure to better adapt to the rapid changes in the Russian economy, and HP recommended we consolidate and virtualize our data center,” said Tatyana Sergeeva, deputy head, Administration of Automation Information, Finance Committee of St. Petersburg. “Since we chose standards-based HP Integrity servers, we are secure with our investment.”

HP customers in Brazil and China include Seara Alimentos S.A. (manufacturing/food processing), Tribunal Superior Eleitoral (public sector/elections), China Pan Steel Group (manufacturing), Industrial and Commercial Bank of China (financial services), Tsingua University, CIECC (Ministry of Commerce information support), Second Affiliated Hospital of Dalian Medical University, Hunan Labor & Social Security Department, Guangxi Post (post office) and Huazhong University of Science & Technology.

Regional market trends driving HP’s growth

Sixty-five percent of HP’s first quarter 2006 revenues came from outside the United States. In the BRIC nations, customers are demanding regional vendor presence and local capabilities such as design and solution centers, authorized training centers, and research and development facilities. HP is responding to this demand with new facilities such as the Linux Expertise Center in Bangalore, India, and the new HP Labs in Beijing.

Customers also are turning to HP for its comprehensive solutions and localized domain expertise in rapid-growth vertical segments, including network service providers, financial services, manufacturing, public sector and oil and gas.

More information on HP Integrity servers is available at www.hp.com/go/integrityserversolutions.

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)Percentage of growth from HP’s first fiscal quarter 2005 to first fiscal quarter 2006.

(2)IDC, “Brazil, Russia, India, China – IT Market Outlook in Four Emerging Markets,” #LA3617, January 2006.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could 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 but not limited to anticipated operational and financial results; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the achievement of expected results and other risks that are described from time to time in HP’s Securities and Exchange Commission reports, including but not limited to the risks described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended Jan. 31, 2006, and other reports filed after HP’s Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2005. HP assumes no obligation and does not intend to update these forward-looking statements.

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