HP, Microsoft Bet $250 Million On Cloud, Promise Sales Boost For Channel Partners

January 19, 2010

D.H. Kass

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HP’s and Microsoft’s sales teams, service professionals and channel partners will assume responsibility for selling the data center’s offerings, including Microsoft’s Azure cloud computing platform.

“In terms of our working together in areas like Windows Azure, we have been working very closely together,” said Bob Muglia, Microsoft president of server and tools business.

“That includes Microsoft purchasing HP hardware for our Windows Azure environment and it also includes work together to help customers think about how they will take advantage of the next generation cloud applications,” he said.

Ballmer shrugged off suggestions that a tighter bond between the two companies might threaten relationships Microsoft maintains with other vendors, specifically, Dell and IBM.

“We don’t have a lot going on with IBM, so let me set the record straight, we’re driving ahead aggressively with Hewlett-Packard,” he said.

Technology collaboration key to agreement, analysts say

In assessment the two companies’ investment in the venture, analysts Charles King, president of Pund-IT Inc. and Merv Adrian, IT Market Strategy founder, in a report said that “while a quarter of a billion dollars spent over three years is hardly chump change, it does qualify as small potatoes for a pair of companies whose combined annual revenues are well north of $150 billion.”

King and Adrian said that rather than the investment, the “technology collaboration is more interesting, since it will occur at a fundamental code level.”

HP’s and Microsoft’s collaboration may not be as fruitful for channel partners as the companies seem to believe it will, King and Adrian said.

“In the SMB market, the value-add is often the degree to which [channel] partners handle installation and integration,” they said.

HP and Microsoft “seemed to imply that much of this business might go to HP’s services organization in the more simplified world of fully integrated SKUs offered as a single purchase,” they said.

“The specific focus of the announcement on Exchange and SQL Server deployments strikes directly at the heart of two of the most lucrative solutions offered by Microsoft’s channel partners, and suggests that many may find themselves increasing competing with HP.”

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