HP HP CEO Meg Whitman

We now know how Hewlett Packard Enterprise plans to keep itself in the cloud computing game now that it decided to shutter its public cloud computing business and not compete head on with Amazon, Microsoft, Google and IBM.

HPE is going to partner with Microsoft to sell Microsoft’s cloud, Azure, HPE CEO Meg Whitman told analysts on the quarterly conference call on Tuesday.

She said that HP “reached an agreement with Microsoft” in which HP will sell Microsoft Azure as its “preferred cloud alternative.” In exchange, HP will become a “preferred” cloud services provider when Microsoft customers are looking for consulting or other help, she said.

More details about the deal will soon be announced, she noted.

The big fish HP wants to catch is something called “hybrid” cloud, where companies buy new computer servers from HP, along with HP’s cloud computing software and consulting services, and turn their own private data centres into mini private clouds. Then they hire a “public” cloud, such as Microsoft Azure (or Amazon or Google or others) to run some of their apps.

They may use the public cloud during their busy season, to nab extra computing power to handle more transactions. They may shift some apps full time to the cloud while keeping others in their data center.

HP, like all the IT equipment providers, sees the hybrid cloud as their saving grace. It’s not the only one going after this market. IBM and Oracle are also all over it, but they are also offering their own Amazon-killer pubic cloud services.

Cisco is trying to grab it by creating a network of public cloud partners out of the smaller web hosting players that are also struggling to compete with the Amazon Web Services behemoth. Cisco calls this plan the Intercloud.

But HP’s partnership with Microsoft is a killer move given that HP will no longer compete with Microsoft’s cloud directly. And if it doesn’t work out, HP can always fire up a similar partnership with Azure’s competitors.

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