HP, Microsoft Alliance Echoes Moves by Cisco, VMware, IBM

HP and Microsoft's announcement of a closer partnership around software and hardware offerings are in line with the trend among other vendors of tightly integrating offerings to bring customers integrated solutions. Cisco, EMC and VMware have such an alliance, and Oracle is integrating its software with Sun hardware. IBM also is more tightly linking its hardware and software assets in a cloud computing environment.

The expanded partnership between Hewlett-Packard and Microsoft that was announced Jan. 13 is part of a growing trend of vendors bringing together hardware and software assets to give customers a tightly integrated offering to handle a specific application or service.

Vendors are bringing together hardware and software assets to give customers more tightly integrated, easily deployed data center solutions designed for such environments as cloud computing.

Probably the example with the highest profile is the alliance between Cisco Systems, EMC and VMware announced in November, with the three companies pooling their resources to create the VCE (Virtual Computing Environment). The cloud computing platform integrates hardware and software products from all three.

IBM officials in November unveiled their Smart Analytics Cloud offering, wrapping business intelligence services with IBM systems and software.

Oracle officials have said that tighter integration between their software and Sun's hardware will benefit customers of both companies after Oracle completes its $7.4 billion acquisition of Sun, expected to happen sometime this month. In September, the two companies unveiled the Exadata Database Machine Version 2, which marries Sun's hardware with Oracle's database applications.

Now comes Microsoft and HP, which are promising increased business efficiency, improved application performance, better operational capabilities and lower costs with the tighter integration between Microsoft software and HP's ProLiant servers.

"In a way, the HP-Microsoft [partnership] falls in line [with these other initiatives]," said Charles King, an analyst with Pund-IT Research. "Vendors with relatively limited solutions of their own can get together and put out something that is greater than the sum of their parts."

Roger Kay, an analyst with Endpoint Technologies Associates, agreed.

"It is something of a response to the dynamics that have been put into play by Cisco/EMC," Kay said.

During a conference call with reporters Jan. 13, HP CEO Mark Hurd and Microsoft CEO Steve Ballmer both said that the expanded partnership between their two companies had more to do with meeting customer demand than with anything going on in the greater IT world.

"I wouldn't want you to think this was a reaction to anything," Hurd said.

The two companies have committed $250 million over three years to the effort. They also are having engineers from both Microsoft and HP work closely on optimizing the Microsoft software on HP hardware, and Hurd said he is dedicating 11,000 salespeople to specifically pitch the bundled HP-Microsoft packages.

Those packages will include servers, storage, networking and applications preintegrated for Microsoft offerings, such as Exchange Server and SQL Server. The hardware will be optimized to run these applications better than hardware from competitors.

The HP ProLiant servers also will be optimized for technologies such as Microsoft's Hyper-V virtualization offering and System Center management software, which also will work closely with HP's Insight Manager. For example, within the next couple of months, the two companies will announce capabilities in System Center that will more tightly control power consumption in the ProLiant systems, according to Bob Muglia, president of Microsoft's Server and Tools Business.

The partnership also involves Microsoft's Azure cloud infrastructure, with both companies offering services and Microsoft buying HP hardware for the Azure infrastructure.

"We see a lot of focus here on management, which is a huge issue in the cloud," said Clay Ryder, an analyst with the Sageza Group.

Pund-IT's King said that one issue to keep an eye on is how this plays out with the companies' other technology partners. For example, a lot of businesses deploy VMware virtualization on HP servers, and Microsoft works with other OEMs, such as Dell.

"There's going to be some very interesting tap dancing by the two companies over this," he said.

Ballmer admitted that both companies will still work with other vendors, and Ryder said such "coopetition" is commonplace.

"It's a big playground, and there's a lot of space there to play games," he said. "If you're a big competitor in Four Square, you might be partners in kickball."