Pleased to send you last months Blackmore report.

Regards,
Peter

> [Compaq Confidential - Internal Use Only]
> To:  Worldwide Sales & Services team
>
> Another month and another quarter are about to close, and a very sincere
> 'thank you' for all your great work in the quarter.  There has been
> tremendous activity, and September has been filled with headlines about
> new products, new partnerships, new wins, and earlier this week, the
> launch of our new Compaq brand campaign.
>
> This week the senior management team, with the support of many Compaq
> managers, met in San Francisco with more than 100 industry analysts from
> North America, Europe and Asia Pacific where we communicated our vision
> for the future and Compaq's strategy including what we see as the fastest
> growing opportunity around the "edge of the network."  This builds on the
> strategy we launched last November and gives great examples of how we are
> taking leadership in the next generation of e-business requirements driven
> by the growth of both the Internet and wireless.
>
> In addition to the keynote presentations, there were many breakout
> sessions plus informal group and one-on-one discussions. The analysts
> commented that the Compaq team was energized, upbeat and very focused on
> where we are going.  On October 12, we will have a worldwide satellite
> communication of the Compaq strategy to all employees. I would like the
> whole Worldwide Sales & Services team to really understand the
> presentations and quickly become expert in conveying our story to every
> one of our customers and partners throughout the world.  The wins and
> customer partnerships we highlight every month in this report are evidence
> of customers' confidence in Compaq, and I have no doubt that this will
> only increase as we become united in articulating the elements of our
> strategy. You will be hearing more about the communications and training
> efforts around our strategy over the next few weeks.  Until then, I
> encourage you to read the material and presentations posted on Inline at
> http://inline.compaq.com/strategy/usad/index.asp.
>
> During my travels this month I met with many of our employees, customers
> and partners in a number of EMEA operations including Italy, France,
> Switzerland, Germany, Denmark, Norway, Sweden, Netherlands and UK. It was
> good to see the whole of Europe, Middle East and Africa getting back to
> growth mode again with clear evidence of new drive and energy across the
> region.
>
> As well as meeting many customers and partners and participating in
> country reviews, I also was able to support the Compaq World Soccer 2000
> competition that was hosted in Munich. This is a great tournament - hotly
> contested each year, and we had a record of 24 men's teams and 11 women's
> teams from Australia, Japan, USA, Latin America and most European and BDG
> countries. Congratulations to Latin America who won both the men's and
> women's events!
>
> Our largest wins this month
> Southwestern Bell Corp - Compaq is now the desktop and server standards
> for SBC - Dell is out! The $250M, 3-year deal will involve some 90,000
> desktops and 3,000 servers.  SBC is one of the world's largest
> telecommunications firms, which owns brands including Southwestern Bell,
> Ameritech, Cellular One and Prodigy Communications.
> http://newscpq1.inline.cpqcorp.net/article.cfm?storyid=1034
> Cable & Wireless, one of Compaq's global alliance partners, has selected
> Compaq Global Services to provide all Customer Care and Help Desk services
> for its new ASP (application service provider) venture, Cable & Wireless
> a-Services. The contract is expected to generate more than $100 million in
> Compaq revenue over five years.
> http://newscpq1.inline.cpqcorp.net/article.cfm?storyid=1067
> Fiat - $31M Customer Services contract over IBM, HP, Sun and
> Wang/Getronics to manage all of Fiat's service activities providing a
> multi-vendor maintenance contract as well as optional value-added services
> including software, managed services and business critical.
> UMC - $20M CIM project for one of the first 300mm Wafer Foundries in the
> world, which will lead to Compaq providing the professional services to
> all future 300mm Fabs at UMC.
> Salomon Smith Barney - $20M project to provide disposal services,
> implementation services asset management, and a support contract to roll
> out 22,000 desktops and 500 servers
>
> Huge success with Bertelsmann AG
> In another example of a great partnership - Bertelsmann, which is one of
> the largest media houses in the world, this month, announced its plan to
> provide each of its 75,000 employees with his/her own private Internet-PC.
> The goal of the program, known as "Alle ins Netz," which means "Everyone
> to the Net," is to ensure all of its employees and their families have
> access to the new media, worldwide resources and information.  Compaq was
> selected the exclusive hardware and services partner - a win valued at
> $40M - because of our ability to ensure consistent worldwide products and
> services.
> Employees can choose either a Deskpro EX desktop, including a S710
> monitor, or an Armada E500 notebook. All systems are offered with Windows
> 98 and a large package of application software. The rollout, which
> includes Bertelsmann's 17,000 employees in the U.S., has already started
> outside the company's headquarters in Germany.
> Dublin Technical Customer Support Center (TCSC) brings home the gold
> Most people have been tuning into the Olympics in Sydney nightly, but on
> September 19 all eyes were on Birmingham, UK, where the 5th annual
> European Call Center of the Year Awards were held.  Out of eight  awards
> presented, the Dublin TCSC brought home gold medals in two categories:
> Best Call Center Design and Best Call Center Training.  More than 180 call
> centers from across Europe competed for the prestigious awards.  In July,
> the TCSC was selected one of 30 finalists, and a panel of judges visited
> the TCSC to see first-hand what Compaq does on a daily basis.  The gold
> medals show that Compaq Customer Services is at the top of the industry
> and has a lot to be proud of.  This is a tremendous accomplishment for
> everyone in the TCSC, but particular thanks and appreciation go to the
> Facilities Team and the Training Team for their dedication and effort.
> Congratulations!!
>
> Compaq Financial Services opens new branch, books sales
> Already serving more than 90% of our key markets, Compaq Financial
> Services (CFS) continues to extend its global reach, recently opening a
> new branch in Israel. The move is designed to provide Compaq-branded
> financing and services to one of the world's fastest-growing markets for
> startup technology companies.  CFS also recorded a couple of tremendous
> wins, including a $45M server contract with South Korean Internet company
> Thrunet and online broker E*Trade for a large installation of AlphaServer
> GS320 servers.
>
> Thanks for your outstanding participation in the VOW survey
> Yvonne Jackson's recent communication of the VOW participation rates
> touted an 81% participation rate company wide, compared to 70% last year.
> I'm very proud to report that the Worldwide Sales & Services participation
> rate was 80%, equaling 34,747 responses.  This represents 63% of the
> corporation's 55,300 responses.  The coming month is when the real work
> begins.  In late October, all people managers will begin receiving their
> survey results and be trained on analyzing the data.  Then your mangers
> will be plan feedback sessions with you.  These meetings will involve the
> sharing of the survey results, action planning around the major
> improvement needs, and the establishment of Process Improvement Teams.
> I look forward to seeing your process improvement efforts, for it is your
> involvement on these teams that makes Compaq a better place to work, which
> in turn, drives up our stock value!
>
> Worldwide sales portal coming
> As part of a continuing effort to reduce administrative duties for Compaq
> salespeople, provide better training and more appropriate information
> about our products and services, our Worldwide Selling Effectiveness Team
> is testing several initiatives, including sales training, an end-to-end
> selling and marketing process and a worldwide sales portal.  The portal
> will provide a single Web interface, giving salespeople the information,
> training and tools tailored to the job, the customer segment and the
> GEO/country/region. The goal is to have a worldwide portal pilot by the
> end of Q4.
>
> Avaya announced international relationship with Compaq
> Avaya, the former Enterprise Networks Group of Lucent Technologies being
> spun off at the end of this month, recently announced a three-year
> business relationship with Compaq, through which we will install and
> support Avaya's  DEFINITYc business communications systems - and
> applications such as messaging and customer relationship management -
> internationally for multi-national and non-U.S. customers.  The
> relationship will complement Avaya's existing worldwide service
> operations.
>
> This non-exclusive subcontracting arrangement is already under way in
> Spain and Italy with plans to expand to Germany, Switzerland and the UK
> later this month.  The two companies intend to expand the arrangement to
> other countries and regions and other Avaya products in the future.
> Compaq technicians will train at Avaya's Service Centers in Europe, as
> well as side by side with Avaya's own international services force.  They
> will then provide Avaya's customers with installation and on-site support
> services.
>
> Winning in the e-government space
> E-government involves the electronic delivery of services to citizens and
> business communities for the purpose of achieving operational excellence
> and improving the "experience" of government. As the foremost solution
> provider to the public sector, Compaq leads the industry in the design and
> implementation of e-government applications. Compaq teams are engaged in
> delivering e-government solutions and services in the UK, Ireland, Norway,
> Austria, France, India, China, Singapore, Australia, Canada and in
> multiple sites across the US.  For example, we recently won a $5M contract
> with the Defence Housing Authority (DHA) in Australia, which provides
> housing services to the Australian Department of Defence.  They manage a
> housing pool of approximately 23,000 houses plus live-in accommodation on
> bases.  Compaq services are aimed at making DHA an e-business via
> implementation of CRM and online operations.
>
> Compaq to help launch first B2B marketplace to Israel
> Commerce One, Inc., the leader provider ofin global business-to-business
> e-commerce solutions for business, this month announced the creation of
> the leading global Business-to-Business Marketplace in Israel with Bank
> Hapoalim, Israel global financial leader, Compaq Israel, The Israel Corp.,
> Internet Gold and Ofek Newworld. The Israeli MarketSite is expected to be
> connected to the Commerce One Global Trading Web, the world's largest B2B
> trading community.  Comprised of many open e-marketplaces, the Global
> Trading Web provides economies of scale for buying organizations,
> suppliers and service providers worldwide and is anticipated to be of
> significant importance to companies in Israel.  The new company formed by
> the consortium members is anticipated to begin operating the e-marketplace
> in the fourth quarter of 2000. The e-marketplace is expected to be fully
> operational by the first quarter of 2001, with fully localized content.
>
> Consumer update
> * Compaq maintained its worldwide leadership in the consumer market
> segment in 2Q with 11.5% market share, according to IDC.
> * Presario portable PCs maintained their No. 1 U.S. retail sales share
> in July for the 23rd consecutive month, with 41% share, according to NPD
> Intelect.
> * Presario desktop PCs recaptured the No. 1 U.S. retail sales spot in
> July with 41% share, according to NPD Intelect.
> * Business Week's Stephen Wildstrom called Compaq's iPaq Home Internet
> Appliance "a breakthrough" while PC Magazine gave it a 5 Star Rating,
> citing the device is "so simple to install and use that you can widely
> recommend it."
> * Consumer's first foray into television home shopping was a huge
> success when Compaq sold 7,900 Presario units on QVC recently. Compaq set
> a record for the channel's highest revenue produced during an off-holiday
> "Today's Special Value."
> *
> *
> *
> *
>
>
>
> Compaq to host "global solutions" event
> Technical experts from customers across the world flew into Heathrow
> Airport, London, for the one-day, Compaq-sponsored event called "Managing
> Global IT in the Information Age." The September 28 event focused on the
> technology challenges for executing business on a global basic and what
> that means for IT.
>
> News from Business Critical Server Group
> New benchmark results - The AlphaServer GS320 system with Tru64 UNIX has
> taken the lead over HP and IBM in the 300 GB TPC-H benchmark for
> RISC-based systems. This result underscores the new AlphaServer GS series'
> superiority in business intelligence and outstanding ability to perform
> complex queries in real time.  And on September 7, Compaq and Oracle
> submitted TPC-C benchmark results showing that the Compaq AlphaServer
> GS320 system running Tru64 UNIX V.5.1 is the fastest single-system Oracle
> engine. Compaq and Oracle exceeded all other vendors' results, proving
> that the AlphaServer GS platform offers unbeatable price/performance for
> the most demanding transaction workloads and e-commerce applications.
>
> Positioned for growth in 3G wireless - The value of our experience and
> leadership in wireless solutions was validated by Motorola's recent
> decision to include Compaq's Home Location Register (HLR) solution on the
> NonStop Himalaya(tm) platform as one of the critical products within its
> 3G, or third-generation, infrastructure plans. On September 12, we jointly
> announced an expanded OEM agreement in which our HLR solution, which
> already supports nearly 50 million subscribers, will be included in
> Motorola's wireless solutions to offer voice and high-speed wireless
> Internet services simultaneously on an integrated network. This is
> significant because it marks Compaq's inroad into 3G wireless, positioning
> us for growth in this rapidly growing area of the industry.
>
> Oracle field engagement - In early August, more than 200 Alpha sales,
> marketing, and technical field specialists in North America met with
> Oracle management and were trained on the Oracle e-business product suite
> and market strategy. This training and collaboration is rolling out in
> each geographic region.
>
> Headlines from ISSG
> The Industry Standard Server Group had top honors and pride of place at
> the launch of Microsoft .NET on September 26.  We demonstrated the Windows
> 2000 Datacenter software running on a ML770 32-way ProLiant, front-ended
> with 42 ProLiant DL360 servers and a StorageWorks EMA 12000 Storage Array.
> The application demonstrated was an Internet voting application from
> Election.com simulating 200 million votes being processed in a 15-hour
> timeframe. Impressive stuff!!  Another key customer, Home Shopping
> Network, showed how their e-commerce application has outstanding
> performance and significantly lower costs with clustered 8-way ProLiant
> 8500 system. As a further commitment, we announced that Compaq Global
> Services will train and certify 1,000 consultants on Microsoft .NET.
>
> On the same day, we announced a partnership with Andersen Consulting to
> bring large-scale applications to the Microsoft / Compaq platforms.  We
> also announced a strategic alliance with Commerce One to drive mass
> adoption and use of B2B commerce solutions through bundled solutions that
> simplify access and reduce cost of entry.
>
> Recent ISSG product announcements included two Quick Install cluster kits
> that offer one-hour set up for installing UnixWare-based clusters from
> start to finish. These kits enable customers to install all the software
> necessary to run a ProLiant Cluster for SCO UnixWare 7 from a CD and are
> already configured for immediate cluster boot, including the SCO UnixWare
> and UnixWare NonStop(tm) Clusters media. The current Quick Install images
> are specific to the ProLiant ML330 and CL380 clusters.
>
> Competitive information - In the last few weeks, several papers on the
> ProLiant ML330, ML350, ML370, DL380, ML530, ML570 and Compaq's Remote
> Insight Lights-Out have been added to the competitive Website.
> http://inline.compaq.com/pg/ecg/crossdiv/competitive/index.asp
>
> How 'bout that ML570! - The newest benchmark results for the ProLiant
> ML570 are very impressive, ranking it as the first server to break the
> $10/tpmC record!
> http://www.ideasinternational.com/benchmark/tpc/tpcc.html.  The ML570
> server achieved the No. 1 ranking for TPC-C results by price/performance
> across all server platforms achieving 20,207.20 transactions per minute
> (tpmC) at a record low of $9.99/tpmC.
> http://www.compaq.com/products/servers/benchmarks/index.html
>
> Honoring top sales performers
> As we approach Q4, I want to remind the entire sales force about the
> recognition awaiting our top sales performers for the year 2000. First,
> the Compaq Pinnacle Club recognizes sales professionals who achieve 100
> percent of their goals for the year. Second, our GoldQuest Recognition
> Program celebrates the success of the top 8 percent of our sales force, at
> an event held at the five-star ANA and Regent Hotels in Sydney, Australia.
> This will be an event to remember!  Here's wishing you the best of luck in
> reaching your Compaq Pinnacle Club and GoldQuest goals!
>
> Storage center opens
> Last month we opened the Enterprise Storage Customer Center, a new
> 22,000-square foot facility located in Colorado Springs, Colo., that will
> house our most advanced lab for testing and qualifying network storage
> interoperability.
> http://newscpq1.inline.cpqcorp.net/article.cfm?storyid=975.  The facility
> will support enterprise storage initiatives such as developing Open SAN
> technology and the recently announced alliance with IBM.
> http://newscpq1.inline.cpqcorp.net/article.cfm?storyid=837.  Also, our
> alliance with NaviSite Inc. has been formalized.  NaviSite is a provider
> of managed application hosting services, delivering managed storage
> solutions for customers with information-intensive needs.
>
> Citibank team earns praise
> Congratulations to our entire Citibank account team, which recently
> knocked out both IBM and Sun to record our first AlphaServer GS series,
> win for a critical business function within the Global Consumer Business.
> In addition, a letter from a Citicorp representative to Compaq's Say-haur
> Leong calls the companies' relationship "one of its best vendor
> experiences." The letter went on to say, "We are extremely appreciative of
> the extraordinary support we have received from your team over the last
> four years ... We look forward to working with your team on a broader
> basis ... Please congratulate your team for having done a really
> outstanding job so far."
>
> Agent program update
> Since its implementation in early August, the Compaq Agent Program in
> North America has authorized more than 600 new agents.  Between 70-100
> calls per day are being received from agents who want more information
> about the program and details on how to get started.  The Compaq Agent
> Program enables partners to focus on high-margin, value-added services in
> a shrinking hardware margin environment while providing a choice between
> traditional buy/sell and agent models. All partners are eligible to
> participate.
>
> Wins Around the World
> Because you do such a great job of bringing in the wins, the list each
> month just keeps getting longer and longer.  That's good - but I don't
> want the Blackmore Report to get so long that you don't read it!  So,
> beginning this month, I'm going to highlight the key wins in the report
> and point to the complete list of Wins Around the World on Inline.  Please
> continue to read about the hundreds of great wins that come in every
> month.  They're not only a great tribute to your abilities and commitment
> to Compaq, but they're also the real evidence to the outside world that
> Compaq is a great company, providing leading solutions to all our
> customers.  http://inline.compaq.com/wwss/wins/worldwins.asp.
>
> Many thanks for your hard work and outstanding efforts this month.
>
> Regards,
> Peter