Amazon deal boosts HP's standing in dot-com market

Hewlett-Packard's continuing bid to be recognised as a major Internet player got a boost last week when signed HP as its primary server supplier.

As part of the agreement, HP will provide more than 90% of Amazon's technology requirements during the next 18 months, said Jeff Bezos, CEO of Seattle-based Amazon. The deal covers a wide range of Unix, Linux and Windows NT servers as well as software and integration services.

Neither company disclosed financial details relating to the agreement. But HP CEO Carly Fiorina said during a press conference that Amazon has become one of HP's top five customers worldwide.

In a companion deal announced at the same time, HP will become an "anchor tenant" in Amazon's electronics store. This means HP products will be prominently featured and promoted on the site, which reaches an estimated 20 million consumers, an HP spokeswoman said.

The deal announced last week expands an existing relationship between the two companies.

Last fall, Amazon purchased HP's high-end V-class Unix servers to power its main e-commerce applications during the critical holiday season.

Amazon will migrate from its Compaq Computer and Sun Microsystems platforms to HP's technologies over the next 18 months, Bezos said.

"There was nothing wrong with these [technologies]. HP had the best package," Bezos said when asked why Amazon chose to move to HP products.

Amazon represents a major win for HP, a $50 billion corporation that, like other systems vendors, has been trying to make a dent in Sun's dominance in the dot-com market.

Last month, for instance, Sun warded off both IBM and HP to retain its contract as prime supplier to eBay.

"Everybody is really competing for the Internet infrastructure business," said Kelly Spang, an analyst at Technology Business Research Inc. in Hampton, New Hampshire.

"Amazon has got a lot of marquee value for HP," said Laurie McCabe, an analyst at Summit Strategies in Boston. "It's bound to get HP noticed among other dot-coms, especially in situations against Sun."

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