GOVERNMENT

NEW YORK, NY -- Compaq Computer Corporation (NYSE: CPQ) and Intel Corporation (Nasdaq: INTC) announced a multi-year agreement that accelerates availability of next-generation enterprise servers based on the Intel(R) Itanium(TM) processor family. Compaq will transfer key enterprise processor technology to Intel and consolidate its entire 64-bit server family on the Itanium architecture. The companies will work together to expand marketplace adoption of the Itanium processor family. Compaq will build on that high-volume platform to provide its customers with unparalleled price/performance. Today's technology and marketing agreement joins Compaq's advanced systems engineering expertise and large installed base with Intel's leading microprocessor design and world-class volume manufacturing capabilities. Compaq will develop the broadest family of server products -- from supercomputers to web servers -- that all operate on a single microprocessor architecture, the Itanium architecture. Compaq customers will benefit from the most advanced system designs at the lowest possible cost with complete investment protection. Details of the announcement include: * Compaq will consolidate its entire 64-bit family of servers onto the Itanium microprocessor architecture by 2004. In one bold stroke, Compaq is extending its 10 years of leadership in 64-bit computing for the next decade and beyond. Compaq will deliver an additional generation of Alpha technology (EV7) to advance system performance prior to the new generation of the Itanium-based systems, for which the company will provide tools and support for a smooth customer transition. The company will also design and build new NonStop Himalaya systems based on MIPS chip technology until the first shipments of Itanium-based systems are available in 2004. * The new family of Compaq enterprise servers will support Tru64 Unix, Open VMS, and NonStop Kernel, complementing the company's market leadership in Windows 2000 and Linux . * Compaq is transferring significant Alpha microprocessor and compiler technology, tools and resources to Intel. * Compaq will immediately begin to port Tru64 UNIX, OpenVMS and NonStop Kernel operating systems and development tools to the Itanium processor family. Operating system and application development tools compatibility protects customers' long-term investments in Tru64 UNIX, OpenVMS, and NonStop Kernel, as well as advancing the capabilities for Windows 2000 and Linux on ProLiant. * Compaq and Intel have agreed to joint engineering development focused on advanced parallelism for high-end computing. "The bottom line is: we are creating great customer value," said Michael Capellas, Chairman and CEO of Compaq. "Our move to the Itanium architecture provides customers and independent software vendors with the most compelling roadmap to next-generation server technology. Customers get increased performance, price/performance and application support. This reinforces our commitment to customer investment protection as well as providing the best path for future growth. We believe Intel's architecture is the best choice for the enterprise, and for our customers this is truly the best of both worlds." "We are delighted that the market segment leader in enterprise servers is bringing its high-end systems expertise to the Itanium processor family," said Craig Barrett, President and CEO of Intel. "This agreement with Compaq furthers our shared vision of delivering customer value by advancing high-performance, high-volume building blocks. Our agreement will bring higher levels of performance, availability and scalability to systems based on the Itanium processor family." Compaq customers and software vendors such as Black and Decker, the London Stock Exchange and Oracle Corporation said today's moves will strengthen their current and long-term investments in Compaq systems based on Intel's architecture. "Oracle is very excited about Compaq Tru64 UNIX coming to the Intel platform. Intel, Tru64 UNIX, and Oracle 9i and Real Application Clusters is an unprecedented combination," said Lawrence J. Ellison, Chairman and CEO of Oracle Corporation Under the multi-year technology agreement, Compaq is transferring significant Alpha tools and engineering resources to Intel, as well as granting licenses to Compaq's Alpha microprocessor technology and compilers. Over the next couple of years, several hundred Compaq microprocessor engineers, compiler experts and infrastructure employees will be offered employment with Intel. A portion of these engineers will remain with Compaq to complete a next-generation Alpha microprocessor development effort currently underway but will transfer to Intel as their projects are completed. Compaq's transfer of technology and resources to Intel is expected to result in an acceleration and enhancement of Intel's Itanium processor roadmap. The companies are investing in a multi-year marketing program to enable software vendors and Compaq's installed base of customers to move their applications to servers incorporating the Itanium processor family. AlphaServer, NonStop, ProLiant Roadmaps Compaq said it will continue to design and build new AlphaServer systems based on current and upcoming Alpha processor technology through 2003. The company plans to upgrade the current high-end AlphaServer GS Series with a 1 GHz Alpha processor this summer. The next-generation EV7 Alpha processor, which is currently under development, will power a new AlphaServer system planned for introduction late next year. Compaq also will design and build new NonStop Himalaya systems based on MIPS chip technology until the first shipments of Itanium processor-based Himalayas are available in 2004. The company added that it will also continue to aggressively advance its ProLiant server roadmap based on the Itanium processor, with the first Itanium-based systems due in Q3 2001. Compaq, the market-leading provider of industry standard servers using the Intel architecture, will continue its commitment to deliver a rich roadmap of 32-bit Intel architecture-based ProLiant servers to meet customers' scale-out and scale-up requirements. To address customers' scale-out requirements, Compaq will offer a broad range of ProLiant servers including future generations of its ultra-dense servers, the forthcoming hyper-dense blade architecture servers, and other modular server form factors. Compaq will continue to meet customers' scale-up requirements with current and future generations of its popular ProLiant 8-way servers using Intel 32-bit architecture, as well as developing a 32-way ProLiant server based on the Itanium processor family. "We will continue to invest aggressively in scale-up and scale-out of Microsoft technology," Michael Capellas said. "And we will continue to work closely with Microsoft to drive the next generation of Web services and Web delivery through Microsoft. NET." For further information visit www.compaq.com or www.intel.com