This expanded alliance between the companies is aimed at delivering a simple, fast and effective way of building systems that scale quickly and deliver the "lowest possible total cost of ownership", according to Microsoft CEO Steve Ballmer.
The project will involve an engineering roadmap for product development, the delivery of a comprehensive set of integrated solutions, and integrated sales and support, he added.
The companies are taking "a comprehensive look at the entire technology stack", including virtualisation and systems management, Ballmer said, observing that Microsoft and HP have been working together for 25 years.
The transformation from a PC and server centric world to cloud computing is happening, and MS and HP will deliver solutions that integrate the various components, he said.
"The result will be a dynamic IT infrastructure that is automatically provisioned, managed and tuned."
The vision includes the integration of public or private cloud computing models as required. Microsoft will continue to develop the infrastructure for Azure, and HP will offer services for Azure.
What about the plans for actual products? See page 2.
Early offerings for enterprise customers will combine HP Insight systems management software and business technology optimisation software with Microsoft SystemCenter and Hyper-V to automate application deployment, optimise performance, and ensure interoperability.
Plans include highly optimised and easily deployed 'appliances' running business applications such as Exchange Server and SQL Server.
Support services will be delivered by HP Services in partnership with Microsoft Services, and will include OLTP application modernisation and customised BI systems.
The two companies are investing in 32,000 channel partners to support the plan, with measures such as increased pre-sales support, financing through HP Financial Services, and jointly-funded marketing campaigns and lead-generation programs.
"Driving innovation helps businesses establish a competitive advantage," said Mark Hurd, HP chairman and chief executive officer.
"This collaboration will allow HP and Microsoft to offer our customers transformative technology that will reduce costs, generate business growth and accelerate innovation," he added.