Amazon.com Switching to HP as Main Server Supplier

BOSTON (05/31/2000) - Amazon.com Inc. has selected Hewlett-Packard Co. as its primary server vendor under an agreement announced by the two companies today.

Jeff Bezos, Amazon's CEO, said during a press conference that the online retail giant plans to migrate away from Compaq Computer Corp. and Sun Microsystems Inc. servers that it currently uses and replace them with HP systems during the next 18 months.

"There was nothing wrong with (the Compaq and Sun servers)," Bezos said in response to a question about why Amazon decided to switch. But he added that HP offered "the best package" to the company.

In a companion deal, HP will become an "anchor tenant" in Amazon's electronics store and sell a wide range of its computing products directly to consumers via the Amazon Web site.

As Amazon's primary infrastructure supplier, HP will provide more than 90% of Amazon's technology requirements during the next 18 months, the companies said.

The agreement covers a wide range of HP's Unix, Linux and Windows NT servers as well as software and integration services.

The companies didn't disclose any 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.

Today's announcement expands an existing relationship between the two companies. Last fall, Amazon bought HP's high-end V-class Unix servers to power its main commerce applications during the critical holiday season.

Amazon represents a major win for HP, which like other server vendors has been trying hard to stem Sun's dominance in the dot-com market. Just two weeks ago, for example, Sun warded off both HP and IBM Corp. to retain its contract as prime server supplier to eBay Inc.

"Everybody is really competing for the Internet infrastructure business," said Kelly Spang, an analyst at Technology Business Research Inc. in Hampton, New Hampshire. "It's a big revenue opportunity once you get your foot in the door as a preferred supplier to one of these companies," Spang added.

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