Microsoft Corp. (NASDAQ:MSFT) and Hewlett-Packard Co. (NYSE:HPQ) have announced that they will start a large joint venture into which they will invest $300 million.
The purpose of the program is to sell their hardware and software to very large corporate customers. By having closer ties, Microsoft and HP can "work together to develop, test, validate or ensure that products conform to standards and deploy new products." Microsoft says the opportunity exceeds $50 billion, which is about half the size of HP's entire revenue.
It is somewhat difficult to see what the two companies will accomplish together that they would not do on their own. The larger issue is, however, how other Microsoft partners like Dell Inc. (NASDAQ:DELL), Lenovo, and Acer will react to being pushed to the back of the bus.
It can't make them happy.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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