At a recent press release, Hewlett-Packard (HPQ) declared that it’s Enterprise Services division has signed a three-year agreement to improve the performance and quality levels of key application support services of Optus, an Australia-based telecommunications company.

As per the terms of the agreement, Optus will receive management support for applications relating to certain customer billing, data warehouse and other core systems. The company’s applications performance, quality and service reliability will thus be improved.

Although HP did not mention the monetary value of the contract, we believe that this new agreement strengthens the relationship between the two companies.

This is another service agreement, which is a stable and growing line of business for the company.

A few days back, Hewlett-Packard’s Enterprise Services announced that Ahold, an international group of leading supermarket companies based in the United States and Europe, has signed a seven-year infrastructure and applications services agreement, an expansion of its previous agreement.

Under the agreement, HP was to provide management and support services for Ahold’s global data center environment, which includes mainframes, servers and storage. In addition, HP would deploy HP Business Service Automation service to make Ahold’s server and storage capabilities more robust.

So the company is constantly pushing itself to achieve new heights. The recent acquisition announcement of networking major 3Com (COMS) will enable it to challenge networking leader Cisco Systems Inc. (CSCO), while the new business deals and service agreement will generate additional revenues for the company.

This apart, HP is also making some structural changes to its top management positions, promoting Ron Coughlin to run its LaserJet business.

Management expects revenues to decline in the first quarter, but is upbeat about 2010 revenues. We believe that the company will deliver consistent financial results in the coming quarters and the long-term growth prospects of the company remain intact.

Zacks Investment Research

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