MS and HP deal a blow to Digital

An agreement with Hewlett Packard could affect MS? relationship with its other hardware partner

Microsoft seems to have watered down its alliance with Digital after signing a joint technology agreement with Hewlett Packard to reduce the cost of ownership.

As part of the agreement, Microsoft and HP outlined their plans to introduce a range of Net PCs to fit alongside HP?s existing PC Vectra range. The Net PCs are expected to be introduced in the second half of the year, priced at $1,000.

Microsoft and HP announced that they would link their salesforces, consulting groups and development teams in a bid to lower the total costs of PCs within corporates. Both said they would push their rival technologies of Windows NT and Unix as part of this strategy.

The joint announcement has been seen as a blow to Digital, as it was the only hardware vendor to team up with Microsoft to push NT.

Microsoft CEO Bill Gates refused to comment about the company?s alliance with Digital, claiming that it was not the right time to discuss it.

But the announcement forced HP to reaffirm its commitment to Unix. The firm was adamant that it would continue to support the technology instead of jumping on the NT bandwagon.

Richard Belluzzo, executive VP and general manager at HP, said: ?These environments are going to develop. Let time determine how they interact, but we will continue to manage the two.?

He added that corporates would decide whether they wanted two environments, and until then both companies would support their respective technologies.

Neither HP nor Microsoft would reveal how much they had invested in the alliance.