The reinvention of Hewlett-Packard Co. took another interesting twist late last month when the company announced a multi-faceted deal with Qwest Internet Solutions that involves multiple HP lines of business.
The give-and-take deal, valued in the hundreds of millions of dollars by HP estimates, calls for Denver-based Qwest to purchase a series of management tools as well as HP tools used internally for server and disk management but not marketed to the public. Qwest will use the software in its Web-hosting CyberCenters. HP, for its part, will purchase high-speed connectivity from Qwest for its internal use.
The partnership includes an outsourcing component in which HP will take over operational management of seven of Qwests 15 CyberCenters. About 100 Qwest employees will become HP employees in the deal. At the same time, HP is leasing floor space in some of those data centers for hosting applications to its own customers.
The partnership is consistent with HPs strategy to become a more significant player in the hosting services arena—without building out its own data centers, said Bruce Caldwell, an analyst at Gartner Dataquest, in San Jose, Calif.
"This rounds out a global strategy to give them the presence they want in the U.S.," Caldwell said. "They already have similar arrangements in Europe and Asia-Pacific. They will be providing the management services for those operations to support some of their own customers as well as those of Qwest and its channel partners."
As part of the deal, HP will provide technical and operational support for Qwest customers using a variety of hardware, operating environments, middleware and applications—including Oracle Corp. databases.
"Its virtually everything from assisting customers in setting up and running their infrastructure to helping them manage the operations environment to assisting in problem resolution/problem support, capacity and growth issues," said Stephen Huhn, vice president of business development and strategy for HP Services, in Mountain View, Calif. "It is a joint effort—Qwest retains some of the support infrastructure."
The deal involves multiple HP lines of business that collaborated on the deal, according to Huhn. And it represents the type of transaction HP would like to continue to put together.
Such collaboration among different HP organizations is a departure from past practices, where HP units typically operated independently of one another. Its another sign of changes brought about by CEO Carly Fiorina.
"Since Carly Fiorina came into HP, theyve been much more steady-state with their strategies," Caldwell said. "Before, there was a lack of consistency and drive to continue with those. They seem to have been extremely focused and dedicated to their strategies."
The deal with Qwest comes on the heels of the recent unveiling of a companywide software consolidation plan and a new strategy based on platform independence.