May 31, 2000 11:35 AM PDT

HP wins contract to supply Amazon

NEW YORK--Under two deals announced today, Hewlett-Packard will supply equipment to power Amazon.com's Web site and become an "anchor tenant" for the e-commerce giant's consumer electronics business.

Jeff Bezos HP equipment will run 90 percent of Amazon's Web site, making the e-commerce giant one of HP's five largest customers, Amazon chief executive Jeff Bezos said in an interview today at HP's analyst conference in New York. Amazon's Web site currently is run chiefly on hardware from Sun Microsystems and Compaq.

In the second deal, HP will expand the number of electronics products such as printers and handheld computers that will be sold through Amazon's Electronics Store. Though HP PCs currently aren't sold at the store, Bezos didn't rule out the possibility, saying the company's ultimate goal is to "offer everything" at the store.

Bezos said both deals will last 18 months. Other terms of the deals were not disclosed.

The luring of Amazon is important for HP, which freely admits to having lost out on the early boom of the Internet. HP, along with IBM and Compaq, are scrambling to catch up to Sun Microsystems, which analysts say is still the foremost company when it comes to building heavy-duty Internet sites.

Though Sun still is dominant, the market for Internet servers is getting fiercely competitive. Despite some high-profile outages, Sun kept eBay as a customer, but IBM wooed away Network Solutions and has a more recently updated product line than Sun.

Under the deal announced today, HP will supply servers, storage and services. In addition, Amazon employees will use HP desktop computers at work.

HP chief executive Carly Fiorina trumpeted the deal at a news conference today. "This is an affirmation of our ability to provide always-on Internet infrastructure," Fiorina said. Carly Fiorina

Amazon will use HP equipment running Unix, Linux and Windows NT, Fiorina said, though neither she or Bezos would describe in detail which hardware would be used.

"It's a broadening and deepening of our relationship," Fiorina said. HP first began supplying Amazon with hardware for the holiday season of 1999, but this deal greatly expands the relationship. "We had a small position," she said.

The deal took three months to hammer out, Bezos said, adding that "several other companies were vying for the deal."

HP has begun work on translating Compaq and Sun software to HP hardware, Fiorina said. "There was nothing wrong with them," said Amazon chief operating officer Joe Galli, referring to the previous suppliers.

 

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