Microsoft, HP invest $50M to promote .Net

Longtime partners Microsoft Corp. and Hewlett-Packard Co. last week announced a US$50 million investment to promote, sell and help users build systems that rely on Microsoft’s .Net development framework.

By the end of 2004, more than 5,000 HP sales personnel will be trained on .Net technologies, the companies said. In addition, 3,000 HP Services professionals will be certified to work on .Net systems and a new 180-person team of “solution architects” will be formed to sell .Net-based systems that aim to address business needs such as enterprise integration, collaboration, business analytics and intranet portals.

The $50 million investment, which is being split equally between HP and Microsoft, will be spent primarily on training and marketing related to .Net, according to officials at both companies.

In addition to training its sales and services force, HP plans to add about 1,800 consultants to its .Net practice, according to David Stubbs, global program manager for the .Net initiative at HP. The .Net-focused group, which will have 3,000 employees by the end of 2004, will also include 1,200 employees from HP’s current workforce, he said.

HP’s Enterprise Microsoft Services Consulting practice, which also features an infrastructure subspecialty, now employs about 3,500 people. That figure will grow to slightly more than 5,000 as a result of the new initiative, Stubbs said.

Stubbs said HP is keen to have expertise in both .Net and Java 2 Enterprise Edition technologies for building Web services. “Based upon what we’ve seen so far, the vast majority of large companies will have both software infrastructures in their organizations,” he said.

On the flip side, Microsoft recognizes the importance of building “evidence around .Net,” said Bill Brammer, director of the HP alliance at Microsoft. Brammer said the new initiative will further Microsoft’s goal of enabling business partners to help customers, since Microsoft has no intention of being a big services player.

Rob Enderle, an analyst at Cambridge, Mass.-based Giga Information Group Inc., said HP’s commitment “really does tell everybody that .Net is real.”

“The end result is likely to benefit Microsoft more than HP if it gets other [services] players to make heavy commitments to .Net,” Enderle said. “Microsoft depends on partner channels to roll out technology. If people don’t step up, Microsoft doesn’t sell much.”

Thomas Bittman, an analyst at Gartner Inc. in Stamford, Conn., said the initiative will also work to HP’s benefit because HP “needs to be seen as a strong partner with Microsoft” to differentiate itself from IBM and Dell Computer Corp.

“Dell is a box seller, and it’s very efficient, and if HP only competes with Dell on being a better box seller, [HP is] going to lose,” Bittman said. “In the competition with Dell, HP needs to position itself as a services and solutions player.”

Compared with IBM, HP needs to be seen as the better Microsoft partner, Bittman said. “IBM is definitely going to promote the Java concept in WebSphere over .Net,” he said.

Michele Cantara, an analyst at Gartner’s Dataquest division in San Jose, said HP’s “ultimate target is not necessarily to be the next IBM, just to maximize their own revenues and profits. I don’t think they need to be another IBM to succeed.”

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