MICROSOFT CONTINUES TO OUTSOURCE INTERNAL SUPPORT AND SERVICES

Contracts Allow Microsoft to Focus on Core Competencies, Streamline IS
Administration

REDMOND, WASH. - JAN. 2, 1996 - Microsoft Corp. is moving ahead with its
comprehensive outsourcing policy, which seeks to contract everyday network
management chores and PC procurement and repair to vendors that specialize
in support for corporate computing systems.

Microsoft's outsourcing policy is shaped by issues that are similar to
those facing many major corporations - the need to maximize computing
resources and budgets, minimize administrative overhead, and maintain
focus on the company's core competencies. Outsourcing contracts, awarded
to companies with successful responses to proposals solicited by
Microsoft, are based on an assessment of demonstrated service commitment,
excellence and suitability of support solutions, financial stability, and
price.

As part of its outsourcing strategy, Microsoft this year has signed
contracts with Vanstar Corp. and ENTEX Information Services Inc. A primary
European procurement vendor will be selected and announced by spring
1996.

Vanstar, based in Pleasanton, Calif., will manage Microsoft's PC
procurements, including delivery, setup and installation of both PCs and
peripherals. The three-year contract applies to approximately 12,500
desktops at Microsoft's domestic sites and is worth approximately $550
million.

Vanstar is a national leader in technology integration, service and
support. The company offers a life-cycle management approach to its
networking services, covering key phases of the process, including
analysis, design, planning, implementation, support, monitoring and
maintenance. Vanstar has integrated its proprietary order management
systems with Microsoft's financial-control systems and has assumed full
management responsibility for day-to-day operations as well as for the 114
Vanstar employees working on-site at Microsoft.

"Until recently, procurement has been spread among nearly 50 resellers
worldwide. This is neither efficient nor the best use of our resources,"
said Joe Monteleone, director of PC procurement at Microsoft. "Like that
of any major corporation, our outsourcing policy seeks to reduce the
number of administrative transactions while placing state-of-the-art PCs
on desktops. We selected Vanstar for this procurement contract because it
provided the right skills and tools for placing, tracking and analyzing
procurement orders."

The agreement between Microsoft and Vanstar calls for a shared-risk pricing
model whereby Vanstar can benefit from reducing Microsoft's overall
costs.

ENTEX, based in Rye Brook, N.Y., is a leading PC systems integrator and
provider of desktop services that recently won a three-year contract for
internal help desk and PC services, covering approximately 40, 000 PCs
installed at 25 Microsoft locations.

"Microsoft is outsourcing nonstrategic, standard and generic network
support to ENTEX, while keeping in-house the strategic skills that support
emerging technologies within our network," said Chris Gibbons, chief
information officer, information technology group at Microsoft. "We are in
the business of developing and marketing great software, services and new
technologies rather than day-to-day management of networks."

ENTEX, which has been a service provider to Microsoft for the past eight
years, has more than 300 dedicated personnel working at Microsoft
locations around the world, from the Redmond campus to Microsoft's
subsidiary in Dublin, Ireland. The contract, which makes ENTEX the primary
desktop-service provider to Microsoft, is worth $50 million over three
years and takes advantage of ENTEX's life-cycle approach.

"Regions will have the autonomy to choose providers for their specific
needs, but overall, the trend is to optimize the number of resellers we
outsource to," said Gary Myall, general manager for computer operations
and network services, information technology group at Microsoft. "We are
seeking a track record in excellence and suitability-to-task in our
vendors and will distribute contracts accordingly."

Founded in 1975, Microsoft (NASDAQ "MSFT") is the worldwide leader in
software for personal computers. The company offers a wide range of
products and services for business and personal use, each designed with
the mission of making it easier and more enjoyable for people to take
advantage of the full power of personal computing every day.
 
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