Critical Path and HP Form Global Alliance to Offer Managed Messaging Service

Business Wire, Oct 10, 2002

Business Editors/High-Tech Writers

SAN FRANCISCO and PALO ALTO, Calif.--(BUSINESS WIRE)--Oct. 10, 2002

Alliance Leverages HP Sales, Services and Technology and Critical

Path's Software and Experience Providing Large

Scale Hosted Email Services

Critical Path, Inc. (Nasdaq:CPTH), a global leader in digital communications software and services, and HP (NYSE:HPQ) today announced a global alliance to offer a managed messaging service that targets the multi-billion dollar enterprise, carrier, and small and medium sized business markets. The alliance combines HP's expertise in providing enterprise-class IT infrastructure services and data center management, and Critical Path's software and operational experience offering a market leading hosted messaging service. In the jointly run service, Critical Path will outsource its data center operations to HP while continuing to provide applications management services and product development. The total value of the deal is estimated at greater than $100 million, encompassing the go-to-market alliance combined with the managed services relationship.

Critical Path and HP will offer carrier-class messaging applications with a quality of service that surpasses what organizations can do today -- at a fraction of the cost. Both companies will market and sell the messaging service, targeting businesses seeking to better manage costs, easily tailor messaging applications to different groups of employees or customers, ensure flexibility in their IT infrastructure and free up valuable IT resources. According to IDC, the worldwide market for messaging applications -- from standalone email to unified messaging to business instant messaging (IM) -- will top $4.2 billion by 2006.

The companies are also announcing that HP will provide systems integration services for Critical Path's packaged software.

"IT departments will be evolving to become service aggregators, providing a variety of services to different classes of users," said Maurene Caplan Grey, a research director with Gartner. "Nowhere is this more true than with the management of messaging services, where IT must support several distinct workgroups with different feature sets. Today's IT organization must be able to provide a variety of messaging options to its users with a focus on service quality, reliability and cost effectiveness."

Critical Path and HP's messaging service is aimed at three markets -- Fortune 2000 companies who want to upgrade, extend or replace legacy email systems, and offer email to workers in factories or remote locations; service providers who want to offer their customers bundled or a la carte messaging services; and the largely underserved SOHO and SME markets.

"With this alliance, we are expanding our hosted messaging business, a business that we pioneered, to also provide a complete managed messaging offering leveraging HP's strong brand," said Critical Path Chairman and Chief Executive Officer William E. McGlashan, Jr. "We will jointly run the messaging service with each company focusing on what it does best. With HP managing the infrastructure and Critical Path managing and enhancing the messaging applications, we will be able to deliver the industry's highest quality, most reliable, cost-effective messaging service. Together, we intend to build the world's largest inter-connected messaging business."

The managed messaging service will offer a suite of integrated applications that will include email, wireless access, IM, group scheduling, personal address book, registered mail, Internet file storage and anti-spam & anti-virus protection. Critical Path's standards-based messaging interoperates with Microsoft's ubiquitous Outlook(TM) email client, and is designed to integrate and coexist with Microsoft Exchange(TM), giving customers a choice of services that span from standard email and calendar packages to full-function collaborative environments provided through the HP-managed Microsoft Exchange service.

"By taking advantage of HP Services' experience with IT infrastructure services and data center management, Critical Path will be free to focus on managing their messaging applications and technology development," said Uli Holdenried, senior vice president, HP Services. "And this relationship allows HP to better help our customers decrease costs, adapt to change and provide a broader portfolio of messaging services to their employees and customers."

In addition to its managed services expertise -- including remote management, hosting and full outsourcing -- HP brings to the alliance its experienced sales force, access to its broad enterprise customer base, as well as its ability to aggressively target the SME and SOHO markets through its service provider customers. Critical Path brings its long and tested operational experience running hosted messaging services on a large scale to more than 500 organizations.

The service will be based on Critical Path's messaging platform -- widely recognized as providing the industry's lowest total cost of ownership -- as well as HP-UX and Linux based servers. HP will initially deploy Critical Path's solutions in its data centers in Europe, North America and Asia, and provide multi-lingual customer service for Critical Path.