Here's the Complicated Back Story of HPE and Microsoft's Latest Collaboration

(Credit: Courtesy of HPE)

Microsoft is betting that new data center hardware from long-time partners Hewlett-Packard Enterprise, Dell, and Lenovo will boost its Azure cloud against rival Amazon

after a long buildup said Monday ProLiant for Microsoft Azure Stack Dell Technologies plans Azure Stack hardware the Microsoft Ignite tech conference Azure Stack box

Related: Microsoft Again Touts Azure and Apps In its Battle With Google and Amazon

HP IBM Intel

Get Data Sheet, Fortune’s technology newsletter.

became more fraught

Related: Here's What LinkedIn Could Mean for Microsoft's Cloud

Google designing their own servers, switching to hardware repeatedly warned one major buyer,

Related: Welcome to the Era of Great Data Center Consolidation

Gartner Note: (September 26, 2017 11:23 a.m. EDT) This story was updated to add quotes from Gartner and pricing for the Dell Azure Stack offering.

. These machines, which Microsoft execs said are now available , will let businesses run Microsoft Azure software in their own server rooms and connect it as needed to Microsoft data centers for additional computing or storage capacity. Pairing on-premises computing with cloud data centers is an example of what techies call "hybrid cloud," and is seen by most tech vendors—other than Amazon—as a key advantage over Amazon, which is mostly about moving customer data and applications into AWS facilities. HPE (HPE)that its server is now available. When HPE previously announced the product in July, it pegged prices at between $300,000 and $400,000 depending on customer configuration. disclosed in May, and will talk more about its entry at in Orlando on Wednesday but a spokesman said list price for Dell EMC Cloud for Microsoft Azure Stack starts at $265,000, including implementation services. Lenovo confirmed that its is now available, but did not provide pricing. That Microsoft (MSFT) relies on hardware makers, also known as original equipment manufacturers or OEMs, to propagate its software is nothing new. Microsoft built its lucrative Windows and Office franchises by teaming with HPE's predecessor company Co. Dell Technologies' forebear Dell Inc., and (IBM). Those companies sold desktop and laptop PCs pre-installed with Windows, and often Office, to consumers and businesses alike. Microsoft partnered with the same companies to push Windows Server software into corporate data centers. For the record, IBM sold its PC business to Lenovo in 2004 and its (INTC)-based server business to the same company ten years later. But Microsoft's rapport with these hardware allies has long been tense and over the past decade as the software giant itself moved into the hardware business, designing Surface tablets and laptops and offloading their production mostly to low-cost contract manufacturers. Thus, Microsoft Surface devices competed directly with laptops from—you guessed it—Dell, HP (HPQ), and Lenovo. At roughly the same time, Microsoft, along with Facebook (FB), (GOOG), Amazon (AMZN), and other Web-based companies which were gearing up their own massive data centers, started andbuilt by contract manufacturers. That put a dent in the sales of name-brand server and networking hardware from companies like HPE, Lenovo, and Dell along with Cisco (CSCO). Over the summer, HPE chief Meg Whitman that the company needs to assess whether it can keep supplying low-end servers to cloud vendors. In one quarter, she blamed the fall-off in sales of such servers on which was later "outed" as being Microsoft. HPE, Dell, and Lenovo need to sell their gear—and related services—to corporate IT departments; Azure Stack gives them a way to do so while also combating the existential threat most of these companies see in AWS. Analyst Patrick Moorhead, president of research firm Moor Insights & Strategy, summed it up: "While hardware makers would like to run inside Azure Public Cloud, the next best thing is to be on customer premises. Azure Stack gives them a way to do that." (IT) vice president Ed Anderson agreed: Azure Stack gives hardware partners a play in a market from which they would otherwise be excluded, he said via email. "Microsoft is effectively throwing them a bone. I think the challenge for the OEMs is to demonstrate real value in this relationship, which means driving Azure adoption and increased utilization. If the hardware OEMs get in the way of this primary goal, or slow down the process in any way, Microsoft is likely to build its own system and once again bypass their partners."