March 19, 1997 2:00 PM ET

Microsoft and HP get ready to get cozy
By Paula Musich

  Microsoft Corp. and Hewlett-Packard Co. today will announce a wide-ranging alliance that encompasses everything from total cost of ownership to electronic messaging, as well as service and support.

Microsoft CEO Bill Gates and HP Chairman Lew Platt will detail the two companies' plans to conduct joint marketing as well as service and support initiatives.

HP will market Microsoft's SMS (Systems Management Server) software distribution tool as part of its OpenView IT Administration suite. SMS overlaps, however, with software distribution and change management tools in the Norton Administrator for Networks suite that HP recently acquired from Symantec Corp., said Chris King, an analyst at Meta Group Inc., in Reston, Va.

HP also will begin providing service and support programs that are centered on Microsoft Windows NT products-mirroring an agreement already in place between Microsoft and Digital Equipment Corp. "HP is looking at the relationship between Microsoft and Digital as a threat. They're trying to get on equal footing with that," said King.

How equal that footing will be is a big question, however, said Brandon Mussler, an analyst at New York-based Illuminata Inc. "HP is trying to displace DEC as Microsoft's Premier Partner, but DEC has exclusive use of a logo'd program with Microsoft," Mussler said.

Still, Mussler observed that "HP more and more has won Microsoft's heart and mind."

As part of the multifaceted agreement, HP has agreed to discontinue marketing and development of its OpenMail for Windows NT and instead will market Microsoft's Exchange messaging software.

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