CISCO ROUTER TECHNOLOGY TO BE INTEGRATED WITH COMPAQ PLATFORM -- FIRST
PHYSICALLY INTEGRATED SOLUTION WILL OFFER IMPROVED FLEXIBILITY AND
SIMPLIFIED NETWORK MANAGEMENT ON AN INDUSTRY-STANDARD PLATFORM

HOUSTON and SAN JOSE, June 26, 1995 -- Compaq Computer Corporation (NYSE:
CPQ) and Cisco Systems, Inc. (NASDAQ: CSCO) today announced an agreement
to bring the computer industry's first integration of the leading
internetworking technology into a value-oriented industry-standard
computer platform. Under the agreement between the two industry leaders,
Compaq will integrate the widely-used Cisco Internetwork Operating System
software (Cisco IOS) (NOTE 1) into a future networking product, based on
industry standards, and bring it to market through the worldwide Compaq
distributor and reseller channels.

This first marriage of router technology with an industry-standard
architecture is intended to redefine the router marketplace by offering
substantial price/performance benefits and other advantages to the network
systems integrator and manager. The architecture of the new platform is
intended to provide a range of scaleable solutions and will include
simplified installation and configuration, and more effective network
resource management.

The first Compaq product with integrated Cisco IOS is expected in the first
half of 1996. Now, for the first time, customers will reap the benefits of
the leading routing technology from Cisco on a cost-effective, scaleable
industry-standard computing platform from Compaq. The Compaq/Cisco
technology is intended to become a component of more extensive integrated
systems.

A router is an intelligent networking device combining high performance
hardware with sophisticated software. It serves as the intersection
between any combination of PCs and workstations, their local area networks
(LANs) and their long-distance or wide area networks (WANs).

With Cisco as our partner, Compaq delivers on its vision of simplified
network computing through innovative internetworking solutions that are
tightly integrated with our client/server strategy, said Gary Stimac,
senior vice president and general manager, Systems Division, Compaq
Computer Corp.

By incorporating Cisco IOS into our products, our customers will for the
first time have a Cisco network solution that is supported by Compaq and
engineered with Compaq quality, reliability and ease of use.

John Chambers, president and CEO, Cisco Systems, Inc., said, There is a
critical need for effective network solutions in the dynamic markets for
small and medium businesses and Fortune 1000 remote-office access. The
leaders in PCs and internetworking have agreed to help users in these
markets maximize their investments in innovative technologies while
reducing total ownership costs. Cisco will continue to extend Cisco IOS
throughout the enterprise to ensure networking interoperability.

As part of the agreement, Compaq is licensing the Cisco IOS, a
sophisticated suite of networking software. Cisco IOS ensures robust,
reliable internetworks by supporting both LAN and WAN protocols,
optimizing WAN services, and controlling internetwork access. The software
has previously been integrated into more than 30 other hub, switch, and
internetworking products sold by Cisco partners. The agreement also calls
for development of joint marketing, cooperative service and support
programs, and use of the Cisco IOS logo. Customer support for future
products emerging from the agreement will be provided by Compaq.

The agreement also calls for cooperative development of network management
applications, incorporating both Compaq technology and the CiscoWorks set
of applications.

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
18003451518.

Cisco Systems, Inc. is the leading global supplier of enterprise networks,
including routers, LAN and ATM switches, dial-up access servers and
network management software. These products, integrated by the Cisco
Internetworking Operating System (Cisco IOS), link geographically
dispersed LANs, WANs and IBM networks. Cisco is headquartered in San Jose,
California.
 
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