HP and Microsoft have signed a business software deal that put them in direct competition with IBM.

The $300 million three-year investment will sell five different types of enterprise technology:

  • Messaging and unified communications, including email, instant messaging and video conferencing
  • Collaboration and content management, software that allows geographically-dispersed employees to collaborate on text, database, video and other files
  • Business intelligence, the analysis of data to help drive business decisions
  • Business process integration, which refers to the different processes enterprises use to run their businesses
  • And core infrastructure, the management of an enterprise's computer systems

The collaboration will generate 30 new products and services in the next year to 20,000 shared customers of the two companies.

"Our customers, when they are looking for these solutions, are eager for what it brings to them, but they also want it at a very attractive cost," said Ann Livermore, VP of the HP's Technology Solutions Group.

Although HP, a maker of computers, servers and storage products, and Microsoft, a maker of operating systems and application software, have partnered for more than 20 years, the scale of this announcement makes it unique, said Livermore. "It pools Microsoft's whole portfolio to the enterprise and our whole portfolio - and that puts us in just a tremendous position."

Microsoft COO Kevin Turner added: "Customers want to hear: how can IT advance the business? How can IT drive value in the business? That's the nature of these five solutions that we have."

The deal puts both companies in competition with IBM, which also sells hardware and software to enterprises, said Rob Enderle, principal analyst with Enderle Group. Although IBM hardware also runs Microsoft software, Microsoft is getting closer to HP, he said. "Microsoft now views IBM as much more of a competitor going forward than a partner and it looks like they are shifting their attention away from IBM services and toward HP's," he said.