Redmond, Washington — Building on a lengthy partnership, Microsoft Corp and Hewlett-Packard Co., two of the world’s biggest tech vendors, announced a new partnership on Wednesday said they will collectively spend $250 million to develop and more tightly integrate their software and hardware offerings for companies looking to move their applications and data online, popularly known as “cloud computing.” This will help business of “all sizes,” as rivals Oracle Corp., International Business Machines Corp. and others transform themselves as one-stop shops for technology, according to HP.
Microsoft and Hewlett-Packard in their announcement said this three-year partnership will include an array of openings, all designed to help businesses trim down some of the burdens of establishing and operating data centers, the facilities that houses corporate software and computer equipment.
The two anticipate that their joint effort to move businesses towards “cloud computing,” will make it easier and more cost-effective for companies to buy and operate server systems, essentially combining Hewlett-Packard’s hardware and Microsoft’s software.
This would deliver enhanced efficiency and performance of operations, according to the companies. Additionally, it would lower the “cost of ownership, enabling customers to deploy systems with confidence”. Cloud Computing is an Internet based technology where users do not need expertise to understand the infrastructure.
“This is all about combining technology and making things as close to “plug and play” as we can,” HP CEO Mark Hurd said during a telephone conference call with Microsoft CEO Steve Ballmer and other executives.
Analysts said the alliance is an indispensable part of a larger trend toward consolidation in the commercial tech industry, at a time when many business and government customers are preparing to invest in new technologies such as virtualization and cloud computing.
“The cloud is an important inflection point in how our customers will be building their next generation applications,” said Bob Muglia, the head of Microsoft’s server and tools business, in a telephone interview.
“We both have decided to speed-up and commit to building the next generation architecture,” said Muglia.
The HP-Microsoft partnership follows such recent developments as last year, software giant Oracle agreed to acquire Sun Microsystems Inc. in a $7.4 billion deal to unite its enterprise software with Sun’s computer equipment.
“Customers are going down to trusting a few trusted hands,” HP’s Hurd said.
Bill Whyman, an analyst at investment firm ISI Group Inc., said the alliance is motivated by a desire to help customers cut costs. “It is an attempt to get many of the same benefits without a full-blown acquisition,” he said.
Hurd in an interview said the new pact with Microsoft “is another sign of deepest collaboration we have had yet in terms of alignment of all resources, from engineering through marketing and services,” which we hope to achieve with products once primarily sold as separate components by different suppliers.
Microsoft’s Ballmer said a “driving force” behind the agreement was the concern among businesses in “cloud computing,” in which companies move online business applications into public or private data centers. As part of their agreement, Microsoft and H-P said they will jointly promote Microsoft’s public cloud computing service, Windows Azure, to customers.
With the recession pinching growth prospects, many tech firms are pushing to become one-stop shops for corporate clients. Rivals such as Amazon.com Inc and Salesforce.com Inc have been selling cloud-based services for some time. That has triggered a wave of acquisitions throughout the tech industry.