Compaq Letter to Customers

You've heard and read a lot by now about the proposed merger of Compaq and Hewlett-Packard. I know you have a lot of questions about what it means for you and your relationship with Compaq. I wanted to write to you directly about the merger, why it makes sense and what's in it for you.

First, I want to thank you for your business and to pledge to continue to provide you with the best technology, the best services and the best support. You can buy with confidence from Compaq because the commitments we make to you today will be honored. We don't know any other way to do business.

At the end of the day, this merger is not about Wall Street or market share. It's not about size. It's about one thing: you, our customers. Carly Fiorina, HP's chairman and CEO, and I pursued this merger because we believe it enables us to do even more for you,to take the best of both companies and create superior customer value. I am confident that the new HP will do that better than any other company in our industry,for large enterprises, small and medium businesses and consumers.

I've met with hundreds of customers since the beginning of the year, and I hear several consistent messages. You want fewer partners. You want an IT partner who can reduce complexity and the number of moving parts. You want someone who can put all the pieces together and let you focus on meeting the needs of your customers. You want someone who delivers creative new approaches for getting the most value and flexibility out of your IT investments.

At Compaq, our vision is to be the leading IT solutions provider. We have already established ourselves as an industry leader in product innovation and global delivery. More recently, we have moved aggressively to build on our considerable strengths in global services and to expand our solutions capabilities. Our strategy has not changed, but our ability to deliver on that strategy,and to meet and exceed your needs,will be greater than ever in the new company.

Carly and I learned very quickly that Compaq and HP share a common vision of the industry, a common commitment to innovation and a common commitment to customer success. By combining our two companies, we will deliver a new cost and value model for the enterprise,a model grounded in our commitment to open, market-unifying standards. We will extend the value of our solutions with services and software. And we will drive useful innovation with the rich intellectual property portfolio,and the significant R and D investments,of both companies.

By marrying HP's "Invent" and Compaq's "Inspiration Technology," we will build a true innovation machine. We will define the technologies and solutions that transform your business and personal experiences,from fault tolerant servers at the high end, to powerful data center servers, to industry standard servers delivering content and Web services at the edge of the network. We will continue to be a leader in enterprise networked storage. We will drive a new generation of innovative access devices and increasingly intelligent printing and imaging systems. And, we will provide the services to plan, design, implement and manage the whole complex.

Both companies are also skilled at partnering. The combined company will be the largest partner by far of Intel, Microsoft, Oracle, SAP and many others. No company will have more support from independent software venders. And we will be in an even better position to leverage the best of the industry for your benefit.

It all adds up to world-class innovation and quality, the broadest range of products and services, comprehensive solutions, the best understanding of customer challenges, and increased sales coverage and support. It also adds up to a company with the financial strength and stability to deal with the most challenging markets.

We do not underestimate the task of combining two large companies. But we have already developed a comprehensive integration plan, and we will do even more detailed planning in the months ahead. Our goal is to make the integration process as seamless as possible for you.

In the meantime, Compaq will continue to focus on our mission: to deliver superior customer value through innovative products, integrated into solutions and delivered globally. Our promise to you is that we will work harder than ever to help you compete and win in a challenging environment. Nothing is more important to us than your success.

I know that many of your questions involve individual products and services. I encourage you to visit our Merger Update site on Compaq.com, where you will find additional information on the merger and a list of frequently asked questions from customers. You can find this site at www.compaq.com/inside/merger/index.html.

I am genuinely excited about the potential of the new HP. It will be a great company with an unwavering commitment to invention and innovation, and an enduring commitment to meet and exceed your needs. We look forward to the opportunity to demonstrate why Compaq today and the new HP tomorrow should be your IT partner of choice.

Sincerely,

Michael Capellas

Chairman and CEO

Compaq Computer Corporation