Under increasing pressure from IBM, Oracle and Cisco, Hewlett-Packard got a boost from Microsoft in the form of a new three-year technology and marketing agreement valued at $250 million.
A core element of the agreement calls for Microsoft and HP to work together to create database and e-mail appliances that can be deployed at the touch of a button. The database appliance could supersede a data warehouse offering that HP has been selling using Oracle software, which opted to replace HP with Sun hardware as part of its move to acquire Sun. However, HP CEO Mark Hurd stressed that Oracle remains a major HP partner, while Microsoft CEO Steve Ballmer said that Microsoft would continue to work with other partners
Nevertheless, Hurd and Ballmer also pledged that the two companies will work most closely on virtualization solutions and HP would lend its support to Microsoft's nascent Azure cloud computing platform, which is built on top of HP hardware. That alliance will also result in new data center container architectures that will be used to drive cloud computing deployments, they said.
Hurd said HP's service people would align on Microsoft products and solutions, which essentially signals an alliance between the two companies to collectively compete against IBM and its vaunted Global Service capabilities.
Specifically, the two companies said they will work more closely on integrating HP's Insight Manager Software with Microsoft's System Center software and optimize Microsoft's application software to run specifically on HP hardware. In addition, Microsoft's System Center software will be able to control power and cooling within a data center by invoking HP software.
As major vendors such as IBM, Cisco and Oracle increasingly focus delivering vertically integrated solutions that span the application to server stack, it's going to be increasingly important for Microsoft and HP to be tightly aligned to compete with rivals that will be touting tight integration across complete end-to-end stacks.
In fact, Ballmer described the alliance with HP as being "cloud computing driven," given that tight application and infrastructure integration will be especially important in next-generation private cloud computing.
Hurd added that while the two companies have been partnered for years, this agreement represents the deepest level of technical partnership between the two companies ever. HP officials added that the agreement also calls for dedicated sales representatives that will sell only Microsoft solutions on HP infrastructure.