Compaq and Intel to Accelerate Enterprise Server Roadmaps


New York -- June 25, 2001 -- Compaq Computer Corporation (NYSE: CPQ)  and  Intel
Corporation today announced a multi-year agreement that accelerates availability
of next-generation enterprise servers  based  on  the  Intel  Itanium  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.


Announcement Overview

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,  OpenVMS,
  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  Oracle9i  and  Real   Application   Clusters   is   an
unprecedented combination," said Lawrence J. Ellison, chairman and CEO of Oracle
Corporation. (See additional industry commentary attached to this release)


Technology Transfer

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  Himalaya
systems 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."


About Intel

Intel, the world's largest chip maker,  is  leading  manufacturer  of  computer,
networking, and communication products. Additional information  about  Intel  is
available at http://www.intel.com


About Compaq

Compaq Computer Corporation, a Fortune Global 100 company, is a  leading  global
provider of technology and solutions. 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 that are sold in more than 200 countries. Information
on Compaq and its products and services is available at http://www.compaq.com

================================================================================

Notes: 

Today's press release  contains  forward-looking  statements  based  on  current
expectations or beliefs, as well as a number of assumptions about future events.
These statements are not  historical  facts  and  are  subject  to  factors  and
uncertainties that could cause actual results to differ  materially  from  those
described in the  forward-looking  statements.  The  forward-looking  statements
address a variety of subjects including, for example, the timing of the adoption
by Compaq of the Itanium processor family,  continued  AlphaServer  and  NonStop
Himalaya systems development by Compaq, the  timing  of  porting  by  Compaq  of
certain operating  systems  and  development  tools  to  the  Itanium  processor
environment, the expected date of the transfer of technology  and  engineers  to
Intel and the potential benefits of the transfer. The following  factors,  among
others, could cause actual results to differ materially from those described  in
these forward-looking statements: the risk that the adoption by  Compaq  of  the
Itanium processor family is delayed or is otherwise  not  successful,  the  risk
that the Compaq Alpha tools, engineering resources and technology  will  not  be
successfully integrated by Intel, and increased  competition  and  technological
changes in the industries in which Compaq and  Intel  compete.  For  a  detailed
discussion of these and other statements, please refer  to  Intel  and  Compaq's
filings with the  Securities  and  Exchange  Commission,  including  the  Annual
Reports on Form 10-K of each of Intel and Compaq for 2000, Quarterly Reports  on
Form 10-Q for the most recently ended quarter, and Intel's 2001 Business  Update
release issued June 7, 2001.