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HP's e-services campaign paying off

Hewlett-Packard's interest in fancy new Internet services is reaping rewards and has taken its business in an unusual direction--managing phone calls.

SAN FRANCISCO--Hewlett-Packard's interest in fancy new Internet services is reaping rewards and has taken its business in an unusual direction--managing phone calls.

At a conference here, Hewlett-Packard announced a partnership today with Telenomics where HP will house the company's telephone system management software, which lets companies offer telephone directories, manage billing, and detect when outsiders are pirating phone lines for their own illegal use.

The deal is the most recent in a series of "e-services" pacts HP has been striking, in which the company gives away hardware and services to partners that charge other companies money to access their software. In exchange for the hardware, HP gets a fraction of the money the partners receive. Wal-Mart also this week signed a multimillion-dollar deal with the Palo Alto, California-based HP to provide interactive services on the company's Web site.

The e-services initiative, the centerpiece of HP's plan to benefit from businesses' move to the Internet, depends on the widespread adoption of this "rent-an-application" or "application service provider" concept.

The advantage of the approach is that companies don't have to worry about the expense of installing, maintaining, and upgrading complex systems, but in exchange they hand over control of vital data and computing services to another firm.

Though International Data Corporation and Dataquest both project a big market for the rent-an-app business, the concept has yet to really take off.

With Telenomics, HP will provide the hardware and services. In this deal, HP will use its 3000 line of computers, said Bill Russell, chief operating officer of HP's enterprise computing group.

The HP 3000 computers are part of a venerable product line that was overshadowed by its 9000 Unix systems, but the firm has been increasing the profile of the 3000 line as part of its e-services plan.

The HP 3000 computers also are part of OpenSkies, a company HP acquired in 1998 that provides reservation services to airlines.

Yesterday, HP coaxed Oracle aboard its e-services initiative. Oracle will optimize its 8i database software to use the e-speak technology.