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HP Wins Six-year IT Outsourcing Contract from Dallas Independent School District

Outsourcing Growth in Education Mirrors HP's Continued Momentum with Businesses

HP (NYSE: HPQ) today announced that the Dallas Independent School District (Dallas ISD) has awarded HP a six-year, multi-million dollar, comprehensive outsourcing project for the district's administrative computing needs. Today's announcement with Dallas ISD is the most recent in a string of outsourcing wins that HP has announced, including Katy ISD, Houston ISD, Agere Systems, Microsoft, City of Espoo, Sonera Corporation, Tata Steel, Johnson Controls, Blue Cross Blue Shield of Michigan and GE Aircraft Engines, among others.

Increasing Support Without Increasing Budget

"Of course, price was an important factor," said, Ruben Bohuchot, associate superintendent/chief technology officer, Dallas ISD. "But we were also looking for a company that could provide us with a total solution. Several vendors offered some creative academic programs, but HP really hit the mark best overall. They listened to our needs, tailored a solution specifically for us and delivered exactly what we asked for."

Dallas ISD had been mandated to increase its computer-to-student ratio; however, it had not received a budget increase to support the mandate. In looking for ways to meet this new goal, the district turned to technology vendors to help identify a creative solution. After receiving input from a number of vendors, Dallas ISD decided to outsource their entire seats management process for all its 8,000 administrative desktops.

The district issued a request for proposal in January and received a large number of bids, including proposals from the top three PC vendors. The district narrowed the field to three vendors by April.

HP won the contract in May and immediately began deliveries, which will total 8,000 new Compaq Evo desktop PCs to replace a combination of older Dell and Compaq PCs the district previously used. According to the terms of the contract, HP is responsible for the acquisition, implementation, desk side support, help desk support, project management and asset disposal for the project. HP is partnering with Houston-based reseller Micro System Engineering (MSE) on the implementation phase of the project.

"Texas schools continue to be at the top of the class when it comes to technology," said Jim Weynand, vice president and general manager, HP Public Sector Organization. "This major outsourcing agreement with Dallas ISD -- combined with the work HP is doing with school districts in Richardson, Katy and Houston -- illustrates a rapidly growing trend: More and more school districts are focusing on what they do best -- teaching students -- while leaving the management of their technology infrastructure to the IT experts, an area where HP excels."

Dallas ISD is the 11th largest school district in the nation, serving approximately 166,000 students on 218 campuses. The district's staff numbers more than 19,000, making it one of the largest employers in Dallas.

HP Financial Services was able to work with the district to arrange appropriate financing for the project. By moving to an outsourcing arrangement for the administrative desktops, the district was able to reassign six full-time desktop support technicians to provide desk side support for the academic PCs, which the district has significantly increased to meet the new computer-to-student ratio directive.

"The move to outsourcing in education mirrors a trend that began earlier with commercial businesses," said Ralph Lipizzi, vice president, Public Sector, HP Services. "Customers want to reduce the risks and costs associated with IT, while at the same time be able to benefit from the advantages it offers. HP is able to leverage its strengths in innovative, industry-leading technology coupled with our services capabilities, including managed services and customer support, to deliver customers a total lifecycle solution, just as we're doing for the Dallas school district."

HP is winning significant new contracts in competitive bids while retaining current customers with contract renewals. A key strength of HP Services is the ability to provide a total solution based on in-house expertise. HP receives millions of customer support service requests per year with 75 percent resolved within one hour and 92 percent resolved the same day.

HP Services is a $15 billion services business, with more than 65,000 employees, providing consulting and system integration, customer support and outsourcing services to help enterprise clients design, deploy and manage mission-critical IT environments. HP is ranked No. 3 in the global IT service industry, which is expected to exceed $626 billion by 2006, increasing from $349 billion in 2001, according to IDC.(1)

MSE is a turnkey computer and internetworking company with offices in Houston, Dallas/Ft. Worth and San Antonio. MSE has expertise in network design, server and personal computer installation and solution implementation and has worked with many educational institutions in Texas, including school districts in Aldine, Angleton, Clear Creek, Dallas, Ft. Bend, Galena Park, Houston, Klein and Spring.

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 Corp. on May 3, 2002. More information about HP is available at http://www.hp.com.

(1) IDC, "Worldwide IT Services Industry Forecast and Analysis 2001-2006," published May 2002.


This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's quarterly report on Form 10-Q for the quarter ended April 30, 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. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation and does not intend 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.