December 13, 2006 3:05 PM PST

Microsoft, HP expand business alliance

Microsoft and HP plan to spend $300 million over the next three years in an expanded effort to jointly sell technology to large businesses.

A new deal announced Wednesday calls for, among other things, more HP workers to be trained to sell Microsoft products. HP and Microsoft are longtime partners in a wide range of consumer and business areas. The $300 million figure covers product development, testing, validation, deployment, and joint sales and marketing costs, the companies said.

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HP and Microsoft to spend $300 million on joint effort

"Through our collaboration with HP, our more than 20,000 joint customers will have access to an expanded set of solutions and services to tackle their most pressing business problems," Kevin Turner, Microsoft's chief operating officer, said in a statement. Among the areas Microsoft and HP plan to focus on are unified communications and messaging, content management, business intelligence and business process integration.

"A lot of Microsoft's new product announcements play into these areas," HP Executive Vice President Ann Livermore said in an interview. "Part of it is new technology from Microsoft, and part of it is just what's hot from our customers."

Microsoft, for example, has announced a big push into the world of telephony and unified messaging, with the company this week saying it has the first test version of its call-handling software.

The tie-up had been expected since Tuesday, when Microsoft and HP announced plans for a press event.

Microsoft's expanded alliance follows last month's business launch of Windows Vista and Office 2007. The company has been increasingly putting IBM in its crosshairs in recent years.

Although Microsoft has about 640,000 partners that help sell its products, Turner described HP in an interview as "the most comprehensive of all of our partners."

Turner said that closer cooperation between HP and Microsoft will have multiple benefits for businesses. "When our stuff works better together, it saves customers money," he said. However, he said that is a "secondary benefit," with the main advantage being the "transformational opportunities" for businesses to reshape themselves.

The expanded partnership has been in the works since the Spring, Livermore said, with work already having taken place at several customers, including Barnes & Noble and The Weather Channel.

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