high-tech services business, computing giant Hewlett-Packard Co. announced an alliance on Tuesday with Accenture, the world's largest consulting company.

HP and Bermuda-registered Accenture, formerly known as Andersen Consulting, have been working together for three years, but said they were formalising the partnership in hopes of expanding it.

The companies said Accenture brings the expertise of understanding what businesses need in the online world, while HP has the technical expertise to carry it out -- networking certain operations, for example, or developing new applications.

"I believe HP and Accenture can work together better than IBM can work with themselves,'' said Ann Livermore, president of HP services. "Bigger is not always better.'' Palo Alto, California-based HP wants to make a big push in services and high-tech outsourcing, but has been relatively quiet in that field since its negotiations to buy the consulting arm of PricewaterhouseCoopers fell apart in November.

Livermore said the Accenture alliance was in no way a "consolation prize'', but also noted in an interview that "the partnership model is an alternative to needing to own that capability ourselves''.

Neither Livermore nor Martin Cole, Accenture's managing partner for outsourcing, would comment on whether HP would try to acquire Accenture.

Neither company is paying the other in this arrangement, and both companies said they were free to pursue other, similar alliances.

Services brought in $7.3 billion in revenue to HP last year, but amounted to $33 billion in sales for IBM.

There is plenty of room for each to grow -- especially since many companies increase their outsourcing in slow economic times. The worldwide market for information-technology services was $665.9 billion last year but should reach $1.4 trillion by 2005, according to a recent report by Gartner Dataquest.

IBM spokeswoman Nancy Kaplan would not comment on the HP-Accenture alliance, but indicated that Big Blue doesn't need to respond by striking a similar deal.

"We can do it all within IBM global services,'' she said. "We're feeling very good about our business.'' HP shares lost 34 cents Tuesday to $27.33 on the New York Stock Exchange, where IBM shares gained $1.94 to $117.70. Bermuda-based Accenture is in the process of an initial public offering.

On the Net: http://www.hp.com/hps http://www.accenture.com http://www.ibm.com/services