Microsoft and Hewlett-Packard further cemented what has always been a strong business partnership with the announcement of a three-year, $300 million agreement to offer an expanded portfolio of enterprise solutions. The two companies said the investment will cover collaborative efforts in solution development, testing, validation, deployment, and joint sales and marketing.

This makes HP the first global partner to deliver comprehensive solutions for Microsoft's  People-Ready Business program.

This new program will focus on five high-growth areas of IT investment: messaging and unified communications; collaboration and content management; business intelligence; business process integration; and core infrastructure.

"This really addresses for customers a complete set of solutions to address business problems," said Ann Livermore, executive vice president of the Technology Solutions Group at HP. "For HP, it plays to our entire company portfolio. That's why we're so rightly positioned to partner with Microsoft."

To get started on its offerings, HP will adopt one of Microsoft's own internal practices: eating its own dog food. Microsoft is known for being the earliest adopter of its own technology and operating with it during the development cycle.

HP will implement the business processes and practices it and Microsoft will be selling as part of People-Ready Business internally before it begins selling it.

There's a lot of potential customers out there. Between the two firms, they estimate they have 20,000 common customers and the partnership can expand to cover another 20,000.

To reach them, Microsoft has created a new, dedicated Solutions Practice specifically for this program. HP will ensure that over 22,000 members of its professional services group will be available, with the number surpassing 30,000 over the next three years.

"This will allow us to go to market as a single stack of the best hardware and software," said John McCain, senior vice president and general manager of HP Services. "We have tens of thousands of professionals ready to go today. Also from an HP services perspective, we see the opportunity to drive significant pull through for both platforms."

Analyst Charles King of Pund-It wasn't surprised at the announcement and said he expects Microsoft to make similar partnership agreements. "Frankly, Microsoft has a lot of irons that are going to be coming out of the fire in 2007," he told internetnews.com. "So if they can go slap some backs and make everyone happy, they will hopefully make sure everyone is on Microsoft's page for next year."

But beyond that, some areas, like business intelligence, are ripe for this kind of effort because they are expensive projects, he said.

"Putting together integrated offerings is not an inexpensive process. It sounds to me like what they are doing is working together, sharing some costs with the thought over the long term this will be an investment well spent," he said.

The potential market is enormous. IDC's chief research officer, John Gantz, said the software market for business intelligence, collaboration, content management and infrastructure software running on Windows will be a $49 billion market in 2007. "Add in communications, hardware, and services, it is easily over $100 billion," said Gantz.


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