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Microsoft, HP push businesses to clouds

Three-year, $250 million effort is aimed at helping businesses lower their technology spending by moving their computing resources online.

Longtime partners Hewlett-Packard and Microsoft said Wednesday that they are adding to their collaboration with a new three-year, $250 million effort aimed at helping businesses move toward cloud computing.

Inside Microsoft's Chicago data center
It takes a lot of servers, as here at Microsoft's Chicago data center, to support cloud computing. Microsoft

There were a ton of buzzwords in the press release, which talks about a "next-generation infrastructure-to-application model," but the two companies will have a conference call in a few minutes to explain more.

"This agreement, which spans hardware, software and services, will enable business customers to optimize performance with push-button simplicity at the lowest possible total cost of ownership," Microsoft CEO Steve Ballmer said in a statement. "Our extended partnership will transform the way large enterprises deliver services to their customers, and help smaller organizations adopt IT to grow their businesses. Microsoft and HP are betting on each other so our customers don't have to gamble on IT."

The latest tie-up was expected, following a media alert from the two companies on Tuesday.

Update 8:30 a.m. PST: On a conference call, Microsoft and HP brought some clarity to what they are doing, as well as plenty of additional hyperbole.

The companies said that the $250 million is an added investment on what they are already doing, working together across sales, marketing and engineering. This Microsoft blog also offers some more details on areas where Microsoft and HP are working together.

"These companies have had a relationship for a long time," HP CEO Mark Hurd said on the conference call. "It was time for us to really align our enterprise businesses."

Ballmer added that the architecture is shifting, whether businesses use Microsoft's Windows Azure or create their own private cloud. "It is absolutely cloud-driven," Ballmer said.

One interesting tidbit is that, as part of the deal, Microsoft is committing to buy HP hardware for its Windows Azure deployments. The Azure demonstration container shown at last fall's Professional Developer Conference was filled with all Dell servers.

Questions on the call centered on what exactly the companies were doing together that was different, with Hurd assuring reporters that he and Ballmer wouldn't be on the call if it was "just another press release."

The deal will involve new dedicated sales representatives, the companies said. Hurd and Ballmer started talking about this deal last April, the two CEOs said.

Ballmer said that the two companies will still work with each other's rivals. For example, HP has a deal with Oracle, and Microsoft works closely with Dell.

"We are going to do a heck of a lot more together," he said.

I'll be talking with Microsoft and HP executives shortly and will try to clarify things further.