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U.S. Air Force Materiel Command: Page 2 of 3

In the first year, the deal is estimated to be worth between $2.0 million and $2.5 million per base, for a total of $24 million to $30 million. AFMC will have the option to renew the contract each subsequent year.

Ahlbin says the value of the deal could increase over the next few years if the Air Force decides to implement full-blown disaster recovery procedures, including off-site data replication, which would require even more storage capacity.

The Air Force decided to go with HP (it was originally Compaq that pitched for the business) after considering proposals from IBM Corp. (NYSE: IBM), EMC Corp. (NYSE: EMC), and Network Appliance Inc. (Nasdaq: NTAP).

It came down to Compaq vs. EMC, and Compaq won out.

"For this particular opportunity, the customer had a preference for Compaq," says Ahlbin. "It's not that [EMC's] Clariion or the Symmetrix couldn't have done it... It was a combination of the fact that Compaq has an economic value-add kind of solution, and they also spent time getting to know the customer's particular needs."