PALO ALTO, Calif. & BRIDGEWATER, N.J.--July 25, 2001--Hewlett-Packard Company and StorageApps today announced the companies have reached a definitive agreement under which HP will acquire StorageApps, a leading provider of storage virtualization solutions, in a stock-for-stock transaction. Under the terms of the agreement, HP will acquire all of the capital stock of StorageApps for HP common stock with a value of $350 million. Completion of the transaction is subject to customary closing conditions and regulatory review. The transaction is intended to be structured as a tax-free reorganization and accounted for as a purchase. Upon completion of the transaction StorageApps will become a wholly owned subsidiary of HP. The addition of StorageApps virtualization technology is intended to allow customers to easily implement and manage storage networks. This technology also enables customers to pool storage devices from different vendors, easily add capacity and readily move data among the devices independent of server operating systems or network infrastructure. As a result, customers can choose the best storage technology for their needs and more flexibly scale their networks to meet the unpredictable storage demands of their businesses. This acquisition strengthens HP's storage offering by adding virtualization as a key component to HP's Federated Storage Area Management (FSAM) strategy. FSAM is designed to enable customers to meet the challenge of managing ever growing and disparate storage systems by growing their storage by a factor of ten without additional people. "The addition of StorageApps' technology extends our leadership position as a complete networked storage solutions provider,'' said Nora Denzel, vice president and general manager, HP Network Storage Solutions Organization. "StorageApps virtualization accelerates our FSAM momentum and allows customers to more quickly and efficiently take advantage of new technology while protecting their legacy investments. This gives customers freedom of choice to mix and match storage technologies from many vendors, allow storage devices to be connected to the network as they are needed and move data between different vendors' storage devices.'' "We were among the first companies to deliver this type of virtualization technology to customers more than a year ago and we've seen exceptional success gaining market acceptance. Essential to that success is our ability to help customers address the needs of unpredictable demands of data growth,'' said Daniel Gittleman, chairman and chief executive officer, StorageApps. "HP is able to rapidly roll out our virtualization software on a global level to help customers facing challenges in managing their networked storage.'' About StorageApps StorageApps -- a leader in virtualization storage software -- develops software and appliances that help give customers controlled, secure access to information. The company's customers range from Fortune 100 companies in financial services to energy and Internet-related companies. More information is available at http://www.storageapps.com.