HP Closes P&G Deal

Tech company to manage Procter & Gamble's IT infrastructure under 10-year, $3 billion managed services agreement

San Jose, CA — May 6, 2003 — Consumer packaged goods giant Procter & Gamble has finalized a $3 billion deal to outsource its information technology infrastructure to HP.

Under the terms of the 10-year managed services agreement, HP Services will manage P&G's IT infrastructure, data center operations, desktop and end-user support, network management and applications development and maintenance for P&G's global operations in 160 countries.

As part of this agreement, P&G will use certain HP technology solutions, including the adaptive infrastructure capabilities provided by the HP Utility Data Center (UDC) and Adaptive Network Architecture. HP said that with UDC, P&G would be able to rapidly deploy and manage servers in its IT environment, providing greater flexibility to respond to changes in its business and IT environments. The HP Adaptive Network Architecture services will provide a policy-based architecture to allow P&G to add and reconfigure networks from its corporate backbone.

"HP's adaptive enterprise solutions will give P&G the ability to more quickly and easily deploy IT resources and services to meet the needs of our global businesses," said Filippo Passerini, global business services officer for Procter & Gamble. "HP solutions combined with HP's innovation and commitment to service excellence will provide the flexible infrastructure we need to remain competitive."

"HP Services will give P&G the flexibility to respond rapidly to changing business needs such as rapid changes to business processes, speedy entry into new markets and strengthened ability to execute acquisitions quickly," said Ann Livermore, executive vice president at HP Services. "P&G also is expected to save money by maximizing the return on its IT investments, through consolidation and virtualization of IT assets, thus enabling utility-based pricing models."

Approximately 2,000 P&G employees from 48 countries, mostly from P&G's Global Business Services unit, will transition to HP Services.

The P&G agreement will commence on Aug. 1, subject to appropriate government and regulatory approvals.

In announcing the latest deal, HP said its services division has signed more than 200 deals since the Compaq merger last year, including the pending finalization of recently announced mega-deal wins at Ericsson and Bank of Ireland, as well as new deals with Cathay Pacific and Shanghai General Motors (SGM), where HP is optimizing the company's supply chain management system.