HP, Microsoft Partner In Cloud Computing

SAN JOSE, Calif. — In another move toward consolidation in business computing, Hewlett-Packard and Microsoft said they will spend as much as $250 million over the next three years in a new collaboration to deliver integrated systems, software and services for cloud computing. The two expect to roll out a variety of products based on Microsoft's Azure cloud service, running on HP systems pre-loaded with Microsoft products such as its Hyper-V virtualization and SQL database software. The announcement highlights an ongoing trend to selling business computers and networks at greater levels of integration. For example, Cisco Systems in March added servers to its product line of switches and routers. HP bid to acquire 3Com in November to boost its communications offerings. The news comes just days before the European Commission is expected to approve the merger of Oracle and Sun Microsystems who are expected to roll out similarly integrated systems. The Oracle/Sun deal was announced April 20 but has been on hold awaiting EC approval, given Sun also owned the open source MySQL database. Interestingly the chief executives of HP and Microsoft said they decided at a meeting in Rome in April to move ahead with their cloud collaboration. "I wouldn't want you to think this was a reaction to anything," said HP chief executive Mark Hurd in a conference call announcing the deal Wednesday (Jan. 13). "We're doing a level of integration no two companies on the planet have ever done," he added. Like other companies following this trend, HP and Microsoft aim to make it easier for end users to install and manage data centers. The duo will create a dedicated sales force to sell cloud-computing products from the two companies including Microsoft software pre-loaded and tested on HP servers. As part of the deal, engineers from the companies will more tightly integrate their separate management and virtualization technologies. The two also will conduct R&D on the design of large data centers that host cloud services. Microsoft's Azure service is hosted at least in part on HP's systems today. However, technical details were scarce on what the companies will actually deliver or when they will deliver it. "This is the deepest level of technical collaboration we have ever done," said Hurd of HP. "We are aligning big parts of our go-to-market strategy, optimizing machine capabilities for Microsoft's SQL Server" and more, he added. The duo faces many competitors. And Microsoft is relatively late to the cloud computing trend in which big data centers run applications for remote PCs and devices linked on the Internet. At the services level, Amazon.com and Google are among a handful of companies that rolled out cloud computing services well in advance of the availability of Microsoft's Azure. Similarly, virtualization software that eases the job of hosting third party applications was available from VMWare, now acquired by storage giant EMC Corp., and as open source code under the Xen project well before Microsoft made its Hyper-V available. The two PC giants have a long history of collaborating in emerging sectors. At last week's Consumer Electronics Show, Microsoft chief executive Steve Ballmer showed an HP slate computer.