COMPAQ COMPLETELY REDESIGNS PROLINEA AND DESKPRO; NEW PCS DELIVER REDUCED
COST OF OWNERSHIP THROUGH BETTER MANAGEMENT, SERVICEABILITY, FAULT
PREDICTION

More Than 100 New ProLinea and Deskpro Models Provide Unprecedented Levels
of Performance and Manageability for Commercial PC Environments
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Compaq today announced:

New ProLinea family: new value-oriented desktop PCs for stand-alone
applications that deliver much greater performance and features at a lower
price

New Deskpro family: new desktop PCs for networked environments that deliver
all the performance, features and value of the new ProLinea, plus
integrated network controllers and Intelligent Manageability

Intelligent Manageability: a collection of breakthrough desktop management
tools and features -- developed in cooperation with leading network
software providers -- that brings some of Compaq's famous server
management technology to the desktop, resulting in a dramatically reduced
total cost of PC ownership and more productive users
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NEW YORK CITY, March 8, 1995 -- In a bold step to dramatically lower
desktop PC ownership costs by simplifying the management of PCs on the
network, industry leader Compaq Computer Corporation (NYSE: CPQ) today
announced a complete redesign of its popular Deskpro product line.
Compaq's new strategy to deliver "Intelligent Manageability" to networked
desktop PCs is designed to add emphasis on network management and
cost-of-ownership while continuing to push the envelope in PC performance
and value. Compaq has also redesigned the value-oriented ProLinea line to
deliver in a stand-alone environment the same levels of performance as the
new Deskpro.

This is the company's largest product introduction ever. At press
conferences today in New York City and around the world, Compaq unveiled
the new ProLinea and new Deskpro families which, combined, total 118
models (NOTE 1), 51 of which are available for North American customers.
New ProLinea and new Deskpro PCs are already in high volume production at
Compaq factories in Houston, Scotland, and Singapore. Large volumes of
units are awaiting shipment to or are already in the reseller channels,
and the rate of production is reaching unprecedented levels.

Compaq also pulled together a diverse group of industry partners -- both
hardware component manufacturers and software developers (NOTE 2) -- to
deliver the first truly effective desktop management capability in the PC
industry. Compaq's initiative has been driven by the needs of businesses,
schools and government agencies that are staking their own futures on
increased productivity and lowered costs as they prepare to retain a
competitive edge into the twenty-first century. While Compaq remains the
leader in compatibility, reliability, performance, technology and value,
Intelligent Manageability extends the company's lead in the commercial PC
marketplace -- a lead that cannot easily be matched by competitors that do
not have the same depth of engineering resources or partnerships.

The new ProLinea and Deskpro models deliver similar levels of high
performance and configurations, while every new Deskpro includes an
integrated network interface controller (NIC) and the set of revolutionary
desktop management tools, as well as features collectively called
"Intelligent Manageability."

A new high-performance ProLinea 575 with a 75 MHz Pentium processor, four
slots/four bays, 420 MB hard drive, 8 MB RAM (NOTE 3), DOS and Windows is
about $1,999 (NOTE 4). A new Deskpro 575 with the same configuration, but
with NIC and Intelligent Manageability built-in, is about $2,149. (Compaq
is also reducing prices on current ProLinea, Deskpro XE, and Deskpro XL
models.

A recent research report by the Gartner Group shows that, on average, the
five year total cost of networked PC ownership has grown from about
$19,000 in the mid 1980s to more than $40,000 today (NOTE 5). Less than 12
percent of the total cost associated with networked PCs are for the
initial purchase. The other 88 percent includes the ongoing costs of
ownership such as training, inventory tracking of hardware and software,
software audits and updates, technical support, user downtime, data loss
from system failure, etc.

"As PC-based networks increasingly become the backbone of today's business
environments, corporations are discovering that these networks are
expensive and complicated to install, maintain and control," said Eckhard
Pfeiffer, president and CEO of Compaq Computer Corporation. "Compaq's
strategy is to simplify this process while at the same time lowering the
total cost of PC ownership. Our aim is to provide useful innovations that
can truly enrich the lives of network administrators and users. We want to
assure that businesses now have the tools and support to confidently run
their entire networked enterprise on Compaq PCs and servers," Pfeiffer
concluded.

Standard Features

Both the new ProLinea and the new Deskpro offer a similar set of innovative
performance and technology features, including today's most powerful
586-class processors, Compaq TriFlex/PCI architecture, PCI local bus,
industry-standard graphics, quad-speed CD-ROM capabilities, enhanced ease
of serviceability, standard Microsoft Windows 3.1 and support for advanced
operating systems such as OS/2 Warp from IBM and Microsoft Windows 95
(NOTE 6).

The new Deskpro and new ProLinea also offer exceptional performance when
compared to the competition. For example, in Windows 3.1-based performance
tests they exceed the performance of comparable competitive products by 5
to 50 percent (NOTE 7).

The new product families were engineered with an efficient, flexible design
that meets a broader range of customer requirements. All new ProLinea and
new Deskpro products share the same three form-factor designs:
three-slot/three-bay desktop; four-slot/four-bay desktop; and
five-slot/five-bay minitower. All share the same 486- and 586-class
processor capabilities, and the same hard drive and multimedia
configurations. In fact, all 118 models are manufactured with a small
number of basic system boards, but with different components installed
depending on the configuration. The new streamlined design -- engineered
for Compaq's advanced cell manufacturing and build to order strategies --
results in faster response to market and technology changes, higher
reliability, improved manufacturing efficiencies, lower product costs,
simplified testing and manufacturing, and greater product availability.

Several improvements in the design of the new Deskpro and new ProLinea also
make them easier and faster to service. For example, the system board can
now be replaced with no tools and by removing only three thumbscrews.
Total time: about four minutes. To accomplish the same task on some
competitors' models requires one or two different screwdrivers, removal of
more than a dozen screws and maybe a half hour of expensive technician
time.

The New Deskpro is Network Ready

All new Deskpro products come standard with an integrated NIC, which
delivers a lower initial purchase cost to customers by eliminating the
time and money associated with buying and installing a separate NIC. This
can represent a value of $150 to $300 or more per PC (NOTE 8). While most
models come with an integrated Ethernet/PCI controller on the system
board, selected models come with an IBM Auto 16/4 Token-Ring ISA Adapter
pre-installed in a dedicated slot. In addition to saving installation
costs, the pre-installed NICs eliminate the need to use an expansion slot.
The Token Ring adapter is manufactured by IBM with compatibility for IBM
and other Token Ring environments.

To simplify PC installation in networks, Compaq has also pre-installed the
Compaq Network Setup Utility as well as leading network client drivers.
With this feature, customers simply configure the software for their
environment, saving the considerable time associated with loading the
utility onto each PC.

The New Deskpro Delivers Intelligent Manageability

Intelligent Manageability incorporates aspects of hardware, firmware and
software. The new strategy is focused on three key areas: AssetControl,
designed to efficiently inventory and monitor PC hardware and software
assets; Fault Management, designed to minimize user downtime; and Security
Management, designed to protect critical data from unauthorized access. In
addition, Compaq has worked closely with Microsoft to ensure the
Intelligent Manageability features are uniquely designed to take advantage
of Windows 95, when it becomes available (NOTE 9).

AssetControl

AssetControl allows administrators to maintain an accurate, up-to-date
inventory of desktop PCs and their components. This enables businesses to
maintain control of their PC assets, and allows for effective and accurate
tracking of drivers and operating systems. It also helps to streamline
service calls since the administrator can provide the service person fast
access to the PC's configuration history.

Until now, the most common way for companies to track their PC resources
was to send workers to each PC to manually record the make, model and
serial number of each PC, or to have the end user record this information
and send it in. If more detailed information was required, the PC hood
would have to be removed to examine the internal components. (In some
cases this information could be obtained by running an "Inspect" program
on each PC.)

AssetControl eliminates these hassles. Its features include: Serial Number
Identification, Identification of Revision Levels (hardware components,
firmware, software drivers), and Identification of AssetControl Monitors.
Information is available locally at the PC (Diagnostics for Windows) or
remotely over the network through popular third-party management
applications supported by AssetControl. With Windows 95, remote support
will also be possible through Compaq's Insight Manager.

Fault Management

As customers continue to move mission-critical applications to PC LANs, it
is crucial to help prevent system failures at both the desktop and the
server. Otherwise, unplanned downtime or loss of critical data can
represent huge costs to a company.

The built-in Fault Management features of the new Deskpro include
comprehensive Fault Prevention features and Rapid Recovery features. Fault
Prevention features include: the recently-announced IntelliSafe Hard Drive
technology, which helps predict hard drive failures before they occur (see
IntelliSafe announcement); Environmental Fault Prevention Tracking, a
hardware/software combination that tracks the internal temperature of the
PC and alerts the user of excessively high internal temperature before
damage occurs; and Network Performance Monitoring, which monitors and
analyzes NIC performance data.

Rapid Recovery features include Proactive Tape Backup, which provides added
data protection from hard drive failure by automatically backing up the PC
hard drive contents to a server tape drive when impending failure is
detected; Flash ROM BIOS, which allows quick updates of the system ROM
without removing the PC hood; and Accurate Contact Information, which
helps assure that if there is a problem, the user knows how to contact an
administrator and the administrator knows everything required to help
address the problem (NOTE 10).

Security Management

As networks distribute access to computer data among many different users,
data security becomes more important than ever. As access to the network
increases, so does the chance of unauthorized access to critical
information. Both the new Deskpro and the new ProLinea product families
employ a number of built-in measures -- designed for implementation with
Windows 3.1 and Windows 95 -- to protect data and hardware from security
breaches.

Desktop Management Solutions Partners Program

Compaq's Desktop Management Solutions Partners Program (DMSPP) is a Compaq
initiative designed to ensure compatibility and integration of Intelligent
Manageability with the leading PC LAN management vendors. Compaq has
worked closely with these vendors to provide remote access to the
Intelligent Manageability capabilities of the new Deskpro. Now, broad
vendor support ensures that Compaq's customers can easily manage Compaq
PCs using their choice of tools supported by the broad industry standard.
The list of vendors participating in the program -- which is expected to
expand over time -- includes Cheyenne Software Incorporated, Frye Computer
Systems Incorporated, Intel Corporation, McAfee Associates Incorporated,
Microsoft Corporation, Network Computing Incorporated, Novell
Incorporated, Saber Software Corporation, Symantec Corporation, and Tally
Systems Corporation.

Strict adherence to network management standards such as Simple Network
Management Protocol (SNMP) and the emerging Desktop Management Interface
(DMI) helps to insure that the new Deskpro will work with a wide range of
management tools today and in the future. SNMP is supported in the new
Deskpro's management agents and through Compaq Insight Manager to enable
communication with a diverse group of devices such as servers, routers and
hubs.

Company Background

Compaq Computer Corporation is the world's largest supplier of personal
computers, offering desktop PCs, portable PCs, and servers. Founded in
1982, the company reported 1994 worldwide sales of $10.9 billion. Compaq
products are sold and supported in more than 100 countries through a
network of more than 38,000 Compaq marketing partners. Compaq also sells
directly to customers through Compaq Direct Plus at 1-800-888-5858. Compaq
provides 24-hour customer support and can be reached through the Compaq
forums on America Online, CompuServe, Internet, and Prodigy, or by calling
1-800-345-1518.

New Deskpro and New ProLinea Performance Compared to the Competition (NOTE
11)

The new Deskpro and ProLinea offer exceptional performance as compared to
the competition. In Windows 3.1 based performance tests the New Deskpro
and ProLinea either meet or exceed the performance of most of the
comparable competitive products. Using the Winstone 95 benchmark, the
charts below illustrate the performance of the New Deskpro and ProLinea
compared to competitive products. Note that higher values represent higher
performance.

NOTES 1: Includes 67 new Deskpro models and 51 new ProLinea models.
      2: Cheyenne, Conner, Frye, Intel, McAfee, Microsoft, NCI,
         Novell, Quantum, Saber, Seagate, Symantec, Tally.
      3: Random Access Memory.
      4: All prices are estimated street prices; reseller pricing will
         vary.
      5: Source: Gartner Group, Stamford CT.
      6: (when available).
      7: Winstone 95 Scores for currently-available products, see
         Compaq Performance White Paper

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     Product               Drive           Graphics        Winstone 95
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     New Deskpro 590       720 MB IDE      QVision 1280/P   116
     New ProLinea 590      720 MB IDE      Cirrus 5434      116
     Gateway P5-90 XL      510 MB SCSI-2   Matrox MGA       109
     HP Vectra XM 5/90C    540 MB IDE      Matrox MGA       96
     IBM 730 P90           365 MB IDE      S3 Vision 864    92
     DELL OptiPlex XM590   340 MB IDE      S3 Vision 864    73
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      8: Includes the cost of a typical NIC, plus typical installation
         cost for a single device.
      9: Some Intelligent Manageability features require Windows 95.
     10: Environmental Fault Prevention, Network Performance
         Monitoring, and Rapid Recovery Features require Windows 95.
     11: From "Performance White Paper, New Deskpro and ProLinea,"
         available from Compaq.

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