Microsoft and HP Extend Private-Label Hosting Opportunities to Value-Added Resellers

REDMOND, Wash. — Dec. 10, 2008 — Microsoft Corp. and HP today announced a joint initiative that will enable value-added resellers (VARs) to benefit from a software-plus-services business model by providing new revenue streams and helping them become strategic advisors to their clients.

HP and Microsoft plan to equip VARs with comprehensive tools and guidance that will enable them to offer “private label” Microsoft solutions that are hosted by managed service providers. As a result, they can generate new revenue streams by offering their small and midsize business (SMB) customers a greater choice of solution delivery methods.

Microsoft and HP are also providing solution configurations based on HP BladeSystem, HP ProLiant and HP StorageWorks products. This will make it easier for customers and partners to plan for and deploy hosted Web services. These solutions can be sold to managed service providers looking to expand their hosting business by deploying the Microsoft virtualization platform and management tools for the optimized delivery of Windows-based workloads such as Hosted Microsoft Exchange Server, hosted Microsoft Dynamics CRM or Windows SharePoint Services, as well as to companies that want to enter the hosting business. For these companies, Microsoft has a full suite of datacenter virtualization products and tools to enable the creation of the dynamic datacenter, providing automated, optimized services on demand that level the competitive playing field relating to size and scale.

By enabling VARs to offer SMB customers a choice of traditional on-premise and as-a-service IT delivery models, the private-label initiative allows VARs to extend their role as strategic IT advisors by helping customers optimize IT investments and productivity as customers migrate to Web services.

In addition to generating a software-plus-services revenue stream for supplying customers with private-label Microsoft solutions, VARs also can provide value-added services such as integration, customization and remote provisioning to managed service provider customers. This initiative expands on HP’s and Microsoft’s existing strategic Frontline Partnership to help increase the adoption of HP datacenter infrastructure and Microsoft technologies by managed service providers.

In a recent Gartner Inc. report titled “Traditional Channel Programs Must Advance Beyond the Resale Model (Alternative Demand and Delivery Acquisition Model),” Gartner Research Vice President Tiffani Bova classified a new Web-based software acquisition model as having far-reaching implications for the traditional resale channel.

“I feel strongly that an alternative demand and delivery acquisition model will require IT vendors to develop new sales tools and training that traditional VARs can leverage should they choose to evolve their current businesses to a more predictable and recurring revenue model based on as-a-service offerings,” Bova said.

“This initiative recognizes the strength of HP’s and Microsoft’s strong partner ecosystem and expands it to give our VARs a scalable and profitable path to delivering partner-hosted software plus services,” said John Zanni, general manager of the Worldwide Software Plus Services Industry in the Communications Sector at Microsoft.

“For VARs that want to be successful in the cloud and software as a service (SaaS) marketplace, HP and Microsoft are the first major technology vendors to deliver the program, products, training and sales tools necessary for them,” said Janet Pretti, vice president of marketing in the Solution Partners Organization at HP. “By allowing VARs to evolve their business model and benefit from a recurring revenue stream, we are opening up new opportunities in a challenging economic climate.”

Optimized Cloud Technology

Building on more than 10 years of experience in providing hosting providers with hardware and software technologies for delivering Microsoft Hosted Exchange services, HP and Microsoft are focused on partnering with VARs to deliver hosted Web services. As a result, VARs will have the tools and solutions needed to capture a large share of the growing cloud services marketplace.

The Microsoft and HP initiative will make it easier for customers and partners to plan for and deploy hosted Web services, with the ability to deliver Windows-based workload virtually anytime and anywhere. Service providers can save money by deploying energy-efficient HP BladeSystem servers, HP ProLiant servers and HP StorageWorks storage technology to power their hosting environments, while VARs can assist customers in reducing their IT total cost of ownership with a hosted technology choice. Most important, VARs can sell both HP’s and Microsoft’s virtualized infrastructures and hosted services, as the two vendors expand and extend their cloud-based computing solutions.

About HP

HP, the world’s largest technology company, simplifies the technology experience for consumers and businesses with a portfolio that spans printing, personal computing, software, services and IT infrastructure. More information about HP (NYSE: HPQ) is available at

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products and services; anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the execution and performance of contracts by HP and its customers, suppliers and partners; the achievement of expected results; and other risks that are described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2008 and HP’s other filings with the Securities and Exchange Commission, including but not limited to HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2007. HP assumes no obligation and does not intend to update these forward-looking statements.

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