Microsoft-HP Cloud Pact: How Big A Deal Is It?

Microsoft and HP announce a $250 million pact, which is focused on a joint "roadmap" for integrating Microsoft software and HP hardware, with implications for the hardware choices for Microsoft's data centers.

Linda Leung

January 14, 2010

2 Min Read
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Microsoft and HP's $250 million, three-year cloud computing pact announced Wednesday has left some pundits wondering whether this is just another marketing agreement to give the companies their 15 minutes on the cloud computing trending topics list, or a response to a similar tie-up between Cisco, VMware and EMC on private clouds announced in November, or even a response to this week's announcement of VMware's acquisition of messaging vendor Zimbra.

The Microsoft and HP pact - which is non-exclusive - involves the two companies "collaborating on an engineering roadmap" for a range of technologies including data management machines, prepackaged applications, virtualization, and management tools.

The companies will work to integrate Microsoft Exchange, Microsoft SQL Server applications, and Microsoft Hyper-V Server with HP hardware, storage and networking gear into prepackaged "machines" for specific applications, including data warehouse, business intelligence, and online-transaction processing.

Customers could hand off the hosting of these systems to a third-party, or they could build private clouds.

HP already offers so-called Smart Bundles of Microsoft Hyper-V on HP ProLiant Servers for small and midsize organizations, alongside its Smart Bundles of ProLiant with VMware.

Microsoft said it would "continue to include HP hardware for Windows Azure platform". Dell, is already heavily used in Microsoft's Azure data center in Quincy, Washington.

To illustrate that the partnership is more than a bundling initiative, HP CEO Mark Hurd said in a press call that the companies will deploy 11,000 service reps to the alliance, according to an InformationWeek story. Hurd added that: "It's the biggest alignment of infrastructure we've ever put behind any kind of enterprise offer we've ever had."

GigaOm reports that the alliance would take on the Cisco-VMware-EMC collaboration, and would be a blow to vendors without such partnerships, such as Dell. GigaOm also raises the danger of vendor lock-in that these company alliances could present.

Longtime Microsoft pundit Mary Jo Foley, writing in ZDNet, poses that timing of the announcement - made a day after VMware's acquisition of Zimbra -- wasn't purely coincidental."There was an awful lot of emphasis by HP and Microsoft officials during the conference call today with press and analysts about the fact this deal has been in the making since April 2009,"she writes. "But remember, there were rumors days ago that VMWare, headed by former Microsoft big-wig Paul Maritz, was going to snap up Zimbra to supplement VMware’s story around providing an end-to-end stack. I’d bet that had something (and maybe quite a bit) about the timing."

Foley cites another Microsoft watcher, Paul DeGroot, an analyst with Directions on Microsoft, as saying that HP is the winner of the pact because "HP will drive customer choices toward whatever is the best deal for HP, VMware or Microsoft ... plus they get the MS sales force and partners bringing HP into their accounts."

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