June 2000

HP got into Amazon’s pocket for e-commerce, but without the 3000

HP announced that Amazon became one of the company’s five biggest customers as a result of a deal announced to replace its Sun and Compaq systems with HP hardware, software and services for the next 18 months. The online retailer, which has gone beyond books to open up stores for everything from lawn furniture to beauty creams but hasn’t posted a profit in its history, gave its current suppliers the gate in early June and pledged 90 percent of its IT budget to HP. (Only storage devices aren’t included in the HP deal, something of a slap in the face to the newest HP disk offerings.) The Amazon empire runs on Unix applications, so the e3000 solution for online commerce from Smith-Gardner isn’t likely to work its way into the datacenters. At the same time, HP became an anchor tenant in the Amazon electronics store, proving that the deal wasn’t based entirely on the superiority of HP’s servers and services.

HP CEO Carly Fiorina talked up the deal as if it proved HP was now in the big game for e-commerce, an oversight considering the army of companies using S-G’s Ecometry to run Web sites that must be ready for hundreds of thousands of transactions every day. Fiorina said the deal will show some profit for HP, something to be noted in the world of Unix sales. Amazon’s president admitted there really wasn’t anything wrong with the existing technology the company was using. Analysts were saying the HP move was a symbolic win for a company still viewed as playing catchup to Sun in the Internet space.


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