Cable & Wireless Establishes Strategic Alliance With Microsoft For Hosted Business Applications

LONDON; REDMOND, Wash.; and HOUSTON, June 6, 2000 — Cable and Wireless plc (NYSE “CWP”), the global telecommunications group, and Microsoft Corp. (Nasdaq “MSFT”) today announced a strategic alliance agreement that brings together their collective strengths with those of Compaq Computer Corp. (NYSE “CPQ”) to create a wide range of cable and wireless application service provider (ASP) services for business users around the world. This alliance will enable Cable & Wireless to offer enterprise-class IT services to small and medium-sized businesses in a single package, at an affordable cost.

The first wireline services are scheduled to be available in both the United States and the United Kingdom in July 2000 and to be rolled out in the rest of Europe and Asia Pacific over the next year. Also, the services will ultimately be available over a variety of wireline and wireless networks as well as support devices ranging from desktop PCs to handheld devices and mobile phones. Wireless offerings will follow in the fall, incorporating Microsoft-developed wireless capability for delivery of services to devices such as the Compaq iPAQ Pocket-PC. Future service enhancements will include applications for sales-force automation, customer relationship management, financial accounting, supply-chain management and human resource management.

Graham Wallace, chief executive of Cable & Wireless, said, “This powerful new relationship means that Cable & Wireless, with Compaq and Microsoft, will set the global standard for end-to-end e-business services for the future. We will provide small and medium-sized businesses with a simple, affordable, secure and reliable solution for their IT needs. This is an excellent example of a value-added service that can be delivered effectively over Cable & Wireless’ global IP infrastructure.”

As part of this agreement, Microsoft will provide marketing, product and support professionals as well as make available the facilities and staff of the Microsoft Partner Solutions Center (MPSC) labs for development of future services, products and testing. Cable & Wireless and Compaq staff are already in place as a result of the November 1999 Cable & Wireless and Compaq joint investment of $500 million to develop and deploy global e-business services. Today’s announcement is a further step in this strategy.

“Microsoft’s collaboration with Cable & Wireless and Compaq will mean great new integrated messaging and collaboration tools,”
said Steve Ballmer, president and CEO of Microsoft. “By basing a range of new services on the Windows platform, Cable & Wireless, Compaq and Microsoft will enable more reliable and more efficient IT services for small and medium-sized businesses.”

The first service will feature the Microsoft® Windows® 2000 operating system, Microsoft Office 2000 and Microsoft Exchange with integrated messaging (voice, e-mail and fax) and collaboration tools that enable groups of users in small and medium-sized businesses to work more effectively together. These services will be delivered from Cable & Wireless datacenters over its single global IP network to a variety of Compaq iPAQ Internet devices.

Charges for these services will be on a monthly per-seat basis and will include software upgrades, security, training, customer support and data storage and backup. All services will be backed by industry-leading service-level agreements.

“Our partnership with Cable & Wireless is all about delivering complete e-business products and services to small and medium-sized businesses, ranging from Internet access devices to hosted business applications,”
said Michael Capellas, president and CEO, Compaq Computer Corp.
“Now, with Microsoft’s commitment, we are enabling Cable & Wireless to provide the most comprehensive end-to-end integrated ASP offering in the world.”

Cable & Wireless also will work with Compaq and Microsoft to deliver application infrastructure services to other ASPs, ISPs and software companies, which will allow these customers to leverage Cable & Wireless’ carrier-class ASP delivery infrastructure to provide application software as a service. The services will be built on a Windows DNA 2000-based platform supported by operational and business support systems such as provisioning, metering and billing, security, customer care and service management.

Today’s announcement will enable the companies to bring their partners, channels and relationships together to create and market hosted e-business solutions for customers in North America, Europe and Asia Pacific. Cable & Wireless, Compaq and Microsoft will define and implement a Microsoft Windows DNA 2000-based platform that will ultimately support thousands of customers and millions of users, from Cable & Wireless’ global network of data centers.

About Cable & Wireless

Cable & Wireless is a major global telecommunications business with annual revenue of around 9 billion (U.S. $14 billion) and customers in 70 countries. Its businesses around the world offer a range of services spanning broadband data, Internet and voice services. Cable & Wireless’ priority for expansion is the fast-growing market of Internet Protocol (IP) and data services for business customers. It is making major investments in developing advanced networks and services in the United States, Europe and the Asia-Pacific region to build the world’s leading global IP infrastructure. With the capacity of this advanced infrastructure and its presence in key business markets, Cable & Wireless holds a unique position in terms of global coverage and services to business customers.

About Compaq

Compaq Computer Corp., a Fortune Global 100 company, is the largest supplier of computing systems in the world. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, communications products, commercial desktop and portable products, and consumer PCs. Compaq products and services are sold in more than 200 countries directly to businesses, through a network of authorized Compaq marketing partners, and directly to businesses and consumers through Compaq’s e-commerce Web site at . Compaq markets its products and services primarily to customers from the business, home, government and education sectors. Customer support and information about Compaq and its products and services are available at .

About Microsoft

Founded in 1975, Microsoft is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Cable & Wireless and the Globe Device are registered trademarks of Cable and Wireless plc

Compaq is registered with the U.S. Patent and Trademark Office. This press release may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include delays in the implementation of changes in delivery models, increased competitive environment and pricing pressures, delays in product rollout schedules, component shortages, slow acceptance for new form factors, employee retention, disruptions related to restructuring actions, the financial condition of resellers, delays in new systems implementation, operational inefficiencies related to sales cycles, equity investment volatility, and emerging market political or economic instability. Further information on the factors that could affect Compaq’s financial results is included in Compaq’s Securities and Exchange Commission (SEC) filings, including the latest Annual Report on form 10-K and the latest Quarterly Report on Form 10-Q.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

What: Microsoft, Cable & Wireless and Compaq teleconference from SUPERCOMM 2000

Who: Senior representatives of Microsoft, Cable & Wireless and Compaq

When: Tuesday, June 6, 2000

8 a.m. EDT

1300 BST

1400 Europe

Call-In Information

Domestic (U.S.) (888) 455-9672 Pass code: Microsoft

International (800) 0 475-5000 Conference Leader: Jonathan Usher

The passcode and the leader’s name will be required to be admitted to the call.

Audio Replay Information

Audio replays of the teleconference call will be available until 5 p.m. EDT on June 13, 2000.

Domestic (U.S.) (800) 216-4439

International (402) 220-3877

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages.

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