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Microsoft Beats Out Rivals for HP Software Deal

HP Inc. plans to use Microsoft Dynamics customer relationship management (CRM) software to run its sales processes, the two companies said Monday. HP sales and support staff have been using Salesforce and Oracle software, respectively, to manage their sales and post-sales processes so this represents a win for Microsoft over two key competitors.

As part of a six-year contract—the dollar value of which they would not disclose—HP (HPQ) plans to roll out the product to about 6,500 HP salespeople and 20,000 support personnel. Total HP headcount is about 50,000 (plus another 6,000 coming aboard as part of its just-signed deal to buy Samsung’s printer unit).

“We want to drive big data and analytics and we had a compelling need for our sales teams and channel teams to simplify, modernize, and speed was critical,” HP chief operating officer Jon Flaxman told Fortune in an interview.

HP’s sales force has been using Salesforce CRM and its support people were using Oracle (ORCL) CRM, he said.

“For us it was a natural move to look at one combined vendor end-to-end,” Flaxman said. This deal adds another dimension to HP-Microsoft partnerships. HP is a huge and longtime hardware partner—its PCs ship with Microsoft (MSFT) Windows and often with its Office applications as well.

There is significant overlap between the two companies’ reseller partners. And since most Microsoft partners run Dynamics CRM already, HP’s use of the product could simplify collaboration and data exchange. HP claims about 100,000 partners worldwide.

“This is more than just sales funnel product,” Flaxman said. “We liked that and with this integrated platform we cam improve our collaboration with customers and partners [and that can] made a huge difference in our thinking.”

Dynamics CRM touts tight links with the company’s Office productivity applications used by millions of business people. And earlier this summer the company announced Dynamics 365, its grand plan to converge its enterprise resource planning (ERP) with CRM. ERP is a fancy name for accounting software.

That, in theory, would give it an advantage over sometimes rival, sometimes ally Salesforce (CRM), which leads the CRM market but lags in ERP.

HP also plans to arm 2,500 of its sales teams with its new Elite X3 tablets and Dynamics CRM starting next year.

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The split of the old Hewlett-Packard a year ago into two companies, HPE (HPE) and HP, meant that there was a lot of sorting and prioritizing of internal IT systems. “As part of the separation we started uncovering what we had and what we inherited. We had compelling needs across multiple fronts including CRM, “Flaxman said.

Microsoft’s $26 billion acquisition of LinkedIn (it reportedly outbid Salesforce in that deal) was seen as an important boost to its CRM ambitions. For salespeople to be able to easily call up potential leads on LinkedIn from their sales screen is seen as a big boon, although Flaxman said that acquisition was not a key consideration in HP’s decision.

For more on the HPE-HP split, watch:

CRM software consolidation may be just the tip of the iceberg at HP. Flaxman said the company now runs a grand total of nine (9!) ERP systems, so stay tuned for more consolidation and update news.