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MS, HP develop business PC line

Hewlett-Packard and Microsoft on Monday will announce an uncommon partnership to sell a line of PCs to small businesses.

Hewlett-Packard's decision to partner with Microsoft and sell PCs under the HP-Microsoft label presages a massive push by HP into the small business market.

On Monday, the two companies will formally unveil the "Hewlett-Packard & Microsoft Small Business Center" PCs based on an HP Vectra 500 Series of PCs.This is a highly unusual move for Microsoft because it does not use the Microsoft brand name on PCs.

HP's strategy will quickly escalate this summer to include a "network kit in a box" which will include a network hub, network cards, and software, said Kathleen Tandy, small business PC marketing manager at HP. HP's goal is to win over the small business market with reliable plug-and-play systems, and later, to complement this with easy-to-set-up networks, said Tandy.

HP sites impressive statistics to back up its foray into this market. About 20 million small businesses employ about 54 percent of the private workforce and account for 52 percent of the sales, according to the U.S. Small Business Administration.

The systems will be sold through the small office centers at select CompuUSA and Computer City stores as well as system integrators that cater to small and medium-sized businesses, HP's Tandy said.

The HP-Microsoft PCs will be bundled with Windows 95 and other Microsoft programs, including Microsoft Office and a Web browser. The configurations will also include a keyboard and mouse built by Microsoft, officials said.

The Vectra 500 PCs will begin shipping Monday, while the Small Business Center family is expected to ship in April. Prices will start at $1,300, the newspaper said. HP is setting up a center in Colorado to offer support to customers via modem.

The 510 CD Office system will come with a 120-MHz Pentium processor, 16MB of RAM, a 1.2GB hard disk drive (HDD), and a 6X CD-ROM drive. It will be priced at $2,329.

At the high end, a 515MCx Office system will pack a 166-MHz Pentium processor, 16MB of RAM, a 1.6GB HDD, a 6X CD-ROM drive, and a 28.8 kilobits-per-second modem for $3,335.