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Industry Leaders To Propel Interoperability, Open Industry
Standards


Compaq Computer Corporation and 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 like 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, VP 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 Modular Array storage systems and
software, which will include IBM 10,000 RPM hard disk
drives. IBM will support Compaq's VersaStor 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, VP 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,
modular 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.


This press release may contain forward-looking statements
based on current expectations that involve a number of risks
and uncertainties. The potential risks and uncertainties
that could cause actual results to differ materially
include: delays in the implementation of changes in delivery
models, increased competitive environment and pricing
pressures, delays in product roll out schedules, component
shortages, slow acceptance for new form factors, employee
retention, disruptions related to restructuring actions, the
financial condition of resellers, delays in new systems
implementation, operational inefficiencies related to sales
cycles, equity investment volatility, and emerging market
political or economic instability. Further information on
the factors that could affect Compaq or IBM's financial
results is included in their respective Securities and
Exchange Commission (SEC) filings, including the latest
Annual Report on form 10-K and the latest Quarterly Report
on Form 10-Q.

Ref: 00/228

COMPAQ, IBM ANNOUNCE INVESTMENTS IN STORAGE NETWORKING
INITIATIVE

TELECONFERENCE AT 4PM (BST)


Media teleconference - call-in number International + 1
212-547-0299, call id: "Announcement"

Speakers are: Michael Capellas - Compaq CEO Nick Donofrio -
IBM, senior vice president and group executive, technology
and manufacturing Howard Elias - Compaq, vice president and
general manager, storage products Linda Sanford - IBM,
general manager, storage division

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