Hewlett-Packard Co and Deloitte Consulting LLC have formed a global alliance that will -

- see the two companies jointly provide software and services for clients in the manufacturing sector.

Palo Alto, California-based Hewlett-Packard, said it teamed up with New York-based Deloitte Consulting to develop its Netaction product lifecycle management software for Deloitte's customers in the manufacturing sector, which includes firms like Brother Industries, Cargill and Hewlett Packard. Deloitte will also provide IT consulting and software integration services as part of the joint sales and marketing agreement.

George Bathurst, software manager for HP services said: "The deal is part of a broader strategy to work with partners, particularly in software where no one vendor can provide all the solutions. The deal is not in the same vein as our vertical industry alliance with PwC, as we have no formal legal ties, and it should go on indefinitely." Bathurst claims the alliance has already secured some multi-million dollar deals among US manufacturing firms including Nestle and Wrigley's, although it has yet to win any contracts in the UK.

This is the latest move by HP to build up its list of IT consulting partners, since failing to acquire PricewaterhouseCoopers' consulting arm in November 2000 for $20bn.

Last June, the company formed a global alliance with PwC Consulting to target the aviation sector, and compete for contracts against industry heavyweights IBM Global Services and EDS, which together account for about 20 per cent of the global market. In May, the company extended an enterprise resource planning (ERP) outsourcing agreement with Accenture Ltd which it signed three years earlier, and claims to have signed over 15 contracts, including a major SAP implementation for energy services firm Halliburton Co.

HP's services arm faced another set back in November 2001, after Sungard Data Systems outbid it for bankrupt business continuity services firm Comdisco Inc, a company that would have added 1,300 consultants and $440m in annual revenue to HP's existing 29,000-person, $7bn outfit. The company is also in the process of acquiring Compaq Global Services, through its $25bn merger with rival Compaq. This would give the new HP combined IT services revenue of $14bn (FY00), pushing it into third place in the worldwide rankings, although some way behind EDS ($18.5bn) and IBM Global Services ($31.6bn). It remains doubtful whether the merger will actually go ahead, and this would prove the biggest body blow yet to HP's services aspirations.

John Topple, global alliances manager at HP, told us: "There are no further acquisition plans in services following the merger, but we will continue growing it through alliances. We have a program in place, which will make further agreements with systems integrators and cover different markets. And we are currently talking to Deloitte about work in the insurance and outsourcing sectors."

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