HP sees virtualization deals this month

By Jim Finkle

BOSTON (Reuters) - Hewlett-Packard Co (HPQ.N) will announce deals this month expanding the server virtualization software it sells with its servers, an executive said on Thursday.

Server virtualization software allows companies to boost the efficiency of hardware, enabling a single machine to perform the work of 10 or more servers.

HP is already working with VMware Inc (VMW.N), Citrix Systems Inc (CTXS.O) and Microsoft Corp (MSFT.O) on customizing their software and Hewlett-Packard's computer servers so they work together better out of the box, HP Vice President Mark Linesch said.

But he did not specify which companies the deal announcements would apply to.

Citrix executives have said their company's server virtualization software would one day be preloaded on most servers sold by Hewlett-Packard and other manufacturers.

Citrix has also told investors that it expects to announce deals with HP and Dell Inc (DELL.O) by the end of this year.

Linesch declined to say whether a deal with Citrix might be announced this month.

"HP is a very good partner with Citrix, a very good partner with Microsoft, a very good partner with VMware. We will engage (further) with those partners," Linesch said in an interview.

"We are going to do some announcements later in the month," he said. "I think they are going to be exciting."

Citrix has said it would get a payment for each HP server shipped with a basic package and a larger license fee for each upgrade sold.

HP was the world's largest maker of servers last year, with a 30 percent market share based on units sold, ahead of Dell's 21.4 percent and International Business Machine Corp.'s (IBM.N) 14.5 percent, according to Gartner Inc.

(Editing by Gary Hill)