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Compaq, IBM Announce Investments in Storage Networking Initiative

Industry Leaders To Propel Interoperability, Open Industry Standards

NEW YORK - 06 Jul 2000: -Compaq Computer Corporation (NYSE:CPQ) and IBM (NYSE:IBM) today announced a strategic agreement to accelerate customer acceptance of open storage networking solutions. Both companies are committed to interoperability of each company's storage hardware and software, and will also sell significant products from each other's storage portfolios. The total of investments currently planned by the companies could exceed $1 billion.

Compaq and IBM will work to help ensure their storage products work seamlessly together. Further, the companies will share their knowledge with the industry to help create standards for open storage networking solutions such as Storage Area Networks (SANs), making storage networks more flexible and easier to deploy and manage.

"With the explosion of e-business and consumer demand for anytime-anywhere products and services,storage plays an increasingly vital role in our customers' Internet infrastructure," said Howard Elias, vicepresident and general manager of Compaq's Storage Global Business Unit. "This agreement assures both companies' customers of a complete portfolio of critical storage technologies that will work seamlessly with future Compaq and IBM products."

Both companies commit to driving interoperability with their respective software and hardware. Under terms of the deal, Compaq will augment its portfolio with IBM's "Shark" Enterprise Storage Servers and select Tivoli systems management software. IBM will augment its portfolio with Compaq StorageWorks(TM) Modular Array storage systems and software, which will include IBM 10,000 RPM hard disk drives. IBM will support Compaq's VersaStor(TM) technology for storage SAN-wide virtualization.

"Today's announcements are a game-changing play," said Linda Sanford, general manager, IBM Storage Subsystems Division. "Delivering true interoperability across our storage products - and open standards for the storage industry - will benefit all customers through greater choice and flexibility, ease of use, and increased speed to deployment. Vendors who continue to promote proprietary systems and standards will find themselves increasingly isolated."

The agreement between the two computer technology leaders underscores the crucial role that storage plays in the future of the Internet and successful e-business. Storage technology has come front and center to change the way companies access and use information to gain a competitive edge in the marketplace. IDC Consulting projects that worldwide revenue for disk storage systems and storage management software will total $53 billion by 2003.

Nick Allen, vice president, Storage Research, GartnerGroup, commented, "This should be a winning combination for all parties. It's a win for the user, who gets more choices with the security of partners and standards; a win for Compaq, which gains a proven, highest-end storage box and a VersaStor endorsement; and a win for IBM, which gets a boost into SAN technologies, midrange storage boxes and a strong partner. These two players are attempting to eliminate non-interoperable SAN islands by draining the oceans with common and interoperable storage and SANs."

Each company plans to provide equipment, software and staffing to support each other's open storage networking/SAN customer centers. At these centers, customers can see for themselves the interoperability of both companies' technologies and products where real-world testing demonstrates the value of open storage networking solutions.

"The networked storage industry took a giant step forward towards open standards, plug-and-play interoperability, any-to-any connectivity and storage virtualization as Compaq and IBM announced a multi-year collaboration and cross-OEM agreement for storage hardware, software, services and solutions,"
said John McArthur, vice president, Storage Research, IDC. "The companies recognize that cooperation on open standards and interoperability best serve the interests of both parties as well as the larger networked storage community. The companies have hit the bulls-eye, but the real winners are the customers."

About Compaq

Compaq Computer Corporation, a Fortune Global 100 company, is the largest supplier of computing systems in the world. Compaq designs, develops, manufactures and markets hardware, software, solutions, and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, and communications products, commercial desktop and portable products, and consumer PCs.

Compaq products and services are sold in more than 200 countries directly to businesses, through a network of authorized Compaq marketing partners, and directly to businesses and consumers through Compaq's e-commerce Web site at http://www.compaq.com.

Compaq markets its products and services primarily to customers from the business, home, government, and education sectors. Customer support and information about Compaq and its products and services are available at http://www.compaq.com.

About IBM

IBM is the world's largest information technology provider (hardware, software and services) with 1999 revenues of more than $87 billion and is the worldwide leader in e-business solutions. The company has more than 300,000 employees and does business in more than 160 countries. For more information on IBM, please visit www.ibm.com.

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Contact(s) information

Glenn Rossman
IBM
914-766-3520
Rossman@US.IBM.com

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