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HP and NEC to Form Outsourcing Alliance Initially Targeting Global Customers in China, Japan and the U.S.

New Alliance to Build on Existing Collaboration in Systems Integration
TOKYO, Dec. 12, 2002

HP (NYSE:HPQ) and NEC Corporation (Nasdaq:NIPNY) today announced that they have signed a Memorandum of Understanding to form an alliance to jointly provide outsourcing services to enterprise customers. HP and NEC may form joint ventures for the delivery of these outsourcing services. The announcement was made in Tokyo by Carly Fiorina, HP chairman and chief executive officer, and Koji Nishigaki, NEC president.

Under the terms of the Memorandum of Understanding, HP and NEC will initially target global customers based in China, Japan and the United States with plans to expand to other regions, including Southeast Asia and Europe, in the future. HP and NEC plan to establish a joint marketing team to develop and market new service offerings.

The companies expect to deliver a full range of flexible, cost-effective outsourcing services tailored to customer needs. These services would range from selective managed services to comprehensive outsourcing, in which the alliance would take over a customer's IT assets and associated human resources.

Customers would benefit from HP's high-quality service management methodology and global support structure, including its operation management centers, as well as NEC's experience in providing outsourcing services and in the development and operation of open, mission-critical systems. Customers also would benefit from the companies' complementary geographic strengths.

"Enterprise customers, particularly those with large scale IT systems, are increasingly turning to outsourcing to reduce costs and to respond to business changes rapidly," said Ann Livermore, executive vice president, HP Services. "This alliance is a powerful combination of HP's worldwide presence and leadership in open, distributed environments as well as NEC's extensive experience with large-scale projects and knowledge of mainframe and open, mission-critical technology."

The new alliance builds on the existing relationship between HP and NEC, which includes a strategic collaboration to deliver large-scale, open, mission-critical solutions and services for targeted global industries. HP and NEC have jointly delivered complex mission-critical solutions in the financial and telecommunications industries, among others.

"NEC and HP are already successfully expanding the global reach of NEC's open, mission-critical systems, which make 24x365 operation and fast response to changing market demands possible," said Toshiro Kawamura, senior vice president and member of the board, NEC Corporation. "We decided to bring together each company's rich experience, resources and know-how to work towards gaining leadership in the outsourcing business, which is expected to enjoy double-digit growth."

HP Services helps customers design, build, integrate, manage and evolve their IT infrastructures to help make them more adaptive, thus reducing costs and enabling companies to be more agile. HP Services has 65,000 services professionals in 160 countries.

In addition to developing open, mission-critical systems, NEC has been providing various services to about 2,500 users, ranging from ASP services to core system outsourcing that addresses the individual needs of customers in financial, manufacturing and other industries.

About NEC

NEC Corporation (Nasdaq: NIPNY; FTSE: 6701q.l; TSE: 6701) is one of the world's leading providers of broadband network and mobile Internet solutions dedicated to meeting the specialized needs of its diverse and global base of customers. Ranked as a Global Fortune 500® company and one of the world's top patent-producing companies, the NEC group delivers tailored solutions in the core technologies and services required in a networked world, ranging from advanced semiconductors solutions, to high-speed, large-capacity, mission-critical systems, system integration, and broadband and mobile technologies. The NEC group employs more than 140,000 people worldwide and had net sales of approximately $39 billion in the fiscal year ended March 2002. For additional information, please visit the NEC home page at http://www.nec.com.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its merger transaction involving Compaq Computer Corporation on May 3, 2002. More information about HP is available at http://www.hp.com.


This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, margins, synergies or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new services or developments or anticipated performance of services; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include execution of a final, binding contract; performance of contracts by customers, suppliers and partners; the timely development, production and acceptance of services and their feature sets; the difficulty of aligning expense growth with revenue changes; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including without limitation HP's quarterly report on Form 10-Q for the quarter ended July 31, 2002 and reports filed subsequent to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001. HP assumes no obligation to update these forward-looking statements.


About HP

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and services, we engineer experiences that amaze. More information about HP Inc. is available at http://www.hp.com.