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Microsoft, HP to team for .Net effort

In a sign of deepening ties, the two companies are set to announce a combined effort to push the software giant's .Net services to HP's corporate clients.

In a sign of deepening ties between Microsoft and Hewlett-Packard, the two companies are set to announce a joint effort to push the software giant's .Net services to HP's corporate clients.

HP notified its employees of the program, known as Net Results, earlier this summer. As part of the program, HP plans to train 5,000 sales and service workers on .Net as well as to certify 3,000 of its consultants to work with the Microsoft software plan, according to a July e-mail to HP employees from services chief Ann Livermore and Enterprise Systems Group head Peter Blackmore.

The deal underscores HP's progress on one of its premerger promises: a tighter relationship with Microsoft.

Prior to the merger, Compaq Computer was one of Microsoft's closest partners, even testifying for the software giant during its antitrust trial. HP, however, had a more distant relationship.

Both HP CEO Carly Fiorina and former Compaq CEO/HP president Michael Capellas had said the new HP would leverage Compaq's relationship in an effort to forge closer ties. That appears to be happening.

"Our relationship has significantly improved," Jim Allchin, Microsoft group vice president, told CNET News.com earlier this month.

Asked if the Compaq influence was the leading factor, Allchin said, "I suspect that's a large part of it."

Evidence of the closer relationship can be found in several recent announcements: HP will be one of the first to offer PCs running Microsoft's Windows XP Media Center Edition operating system, and HP's services unit recently won a deal to manage Microsoft's internal help desk, an expansion of a deal Compaq had prior to the merger.

Not all the moves HP has made since the merger closed indicate a tight relationship. For instance, the company also moved recently to bundle office software from Corel, rather than Microsoft's Works package, on its new consumer Pavilion PCs.

Analysts said the different relationships Microsoft had with the two companies pre-merger stemmed from the divergent origins of Compaq and HP.

HP started out as an inventor of its own technology; Compaq was born as a company offering products compatible with the IBM PC.

Over the years, Compaq was quick to take Microsoft's side, but Hewlett-Packard often hedged its bets. For example, HP bet heavily on Unix while at the same building products that used Microsoft's operating systems. Compaq aligned solidly with Microsoft's Windows NT efforts.

While pre-merger Compaq used its relationship with Microsoft as a prominent marketing tool, HP tended to speak of Microsoft as just another supplier, said IDC analyst Roger Kay.

"From a business perspective, I had a feeling they were a little more arms-length," Kay said.

Still, Kay said, HP and Microsoft have worked closely in some areas for a long time.

"My sense is they've cooperated quietly on technical issues quite a bit," Kay said.

News.com's Wylie Wong contributed to this report.