NEC & Microsoft Expand Strategic Collaboration into IT/Network Convergence Area

*****For immediate use May 24, 2006

NEC and Microsoft today announced an agreement to expand their collaborative relationship for IT/network convergence, including new projects in the enterprise networking area and existing collaborative efforts for server business into next-generation high reliability servers and HPC (High Performance Computing) servers. In addition, the two companies announced the conclusion of a patent cross-licensing agreement.

NEC and Microsoft have been collaborating on PCs since 1979 and on servers since 1993. As a result of these collaborations, NEC maintains the top market share in Japan in both areas.Amid continuing IT/network convergence over the recent years, the collaboration announced today will see an expansion into enterprise networking area. With the many successes of its Windows(R) operating systems for servers and PCs and its Office application software, Microsoft is making significant contributions to improving productivity in workplaces. With its computer and communications technologies, NEC holds the top share in the Asia and Oceania VoIP market with its IP telephony servers. Today’s collaboration agreement leverages the strengths of the two companies – Microsoft’s business application technologies and NEC’S IP technologies – together with their customer bases for joint development and sales promotions.

The expanded collaborative initiatives will take affect in the following 5 areas.

1.Enterprise networking

• Enhanced integration between NEC's UNIVERGE SV7000 IP telephony servers and Microsoft's real-time communications platform, Microsoft(R) Office Live Communications Server 2005. NEC and Microsoft will share the development roadmap and will mutually cooperate on technologies. NEC plans to expand this solution globally, and to that end Microsoft will provide NEC with support in marketing.
• Technical cooperation to develop technologies for improving the quality of VoIP and video.

2. Next-generation high reliability, high performance servers

• Microsoft cooperation will include functional aspects of its Windows Server(TM) OS in order to realize high reliability and high performance in joint development of NEC's and Unisys's high-end servers as well as NEC's and Stratus' next-generation ft (fault tolerant) servers.

3. HPC servers

• NEC and Microsoft will collaborate to integrate Microsoft Windows Compute Cluster Server 2003, Microsoft's HPC operating system under development, and the Global File System (GFS), NEC's file system that enables high-speed transfer of large volumes of data.

4. Patent Cross Licensing

• NEC and Microsoft both develop innovative technologies that are advancing IT/network integration, multimedia and other technologies, for which they have taken out many patents. They have concluded a broad-spectrum patent cross-licensing agreement to promote faster technology development.

5. Collaboration in Japan

• .NET Solution: NEC will expand utilization of Microsoft's .NET system infrastructure in its business packages. The first outcome of this collaboration will be the development and delivery of .NET-supported package software for local governments.
• Media Center PC: NEC is positioning Media Center PCs running Microsoft Windows XP Media Center Edition (MCE) in the center of its consumer PC products lineup and is continuing to expand joint sales promotion activities with Microsoft. Both companies are also carrying out joint technical verifications, and product planning and sales promotions of Media Center PCs for the next-generation OS, Windows Vista.

Through these initiatives, NEC is pursuing its global strategy and is expanding its IT/network integration solutions globally with the support of Microsoft. This is being promoted especially in Europe through NEC Philips Unified Solutions established jointly with Royal Philips Electronics. Also in joint developments with Unisys and Stratus, NEC develops and globally delivers competitive products with the support of Microsoft.

Through integration between NEC's telephony, PC & server technologies and business package application and Microsoft's own products and technologies, Microsoft is driving the realization of new digital workstyle environments for business and new digital lifestyle for home.

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