HP-Microsoft deal, how do you think

Microsoft and Hewlett-Packard have announced a new three-year pact worth $250 million. Although their friendship goes back many years, this new deal is the acme of their proximity. They plan to conquer the enterprise market by bundling their hardware and software together, with the new partnership spanning engineering, sales and marketing. The fact that the two companies are leaders in their respective industries explains why they chose to name their new partnership “Frontline.”

HP CEO Mark Hurd assured reporters that he and CEO Steve Ballmer wouldn't be taking the time if it was "just another press release" and stressed that the deal, which cuts across sales, engineering, and marketing was the tightest tie-up since Bill Hewlett and Dave Packard got together (OK, maybe now I am exaggerating).

This blog post from Microsoft does a somewhat better job of explaining, noting that there will be work across virtualization, management, business applications and the cloud, but HP and Microsoft have already been doing work together in most, if not all of those areas.

If you are struggling to grasp the exact nature of the partnership, then you are not alone. Apparently, Microsoft CEO Steve Ballmer and HP CEO Mark Hurd were so busy raving about their partnership that they forgot to divulge any lucid details. But the information posted on Microsoft Technet does seem to be of some help: “Microsoft and HP will deliver ‘Smart Bundles’ for small and medium businesses. These are a combination of hardware and software, including HP server, storage and networking solutions, coupled with Windows Server Hyper-V and HP Insight software, delivered in a single, cost-effective package.”

The key thing that created the imperative to broaden the relationship is the recognition that the cloud is an inflection point," Muglia said. The shift means customers need a new application model, a new operational model and essentially a new way of thinking about their technology. "The kinds of things we are doing is understanding how we can work together to enable developers to build systems that are cloud-based, always available and can scale out."

As for the business environment in which the two companies will be selling, Muglia said things seem to be better than they were some months ago.

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