Computer builder Hewlett-Packard, located in Palo Alto, was started by William Hewlett and David Packard, both Stanford graduates.
The companies said they were working on finalizing their alliance, which would offer one-stop shopping for customers as telecommunications and information-technology, or IT, products converge.
The deal also calls for HP to "transform and manage a large part of Alcatel-Lucent's IT infrastructure."
The companies did not release any financial details of the arrangement but said the partnership could generate several billion dollars in revenue between the two companies over the next decade.
HP shares dipped 19 cents to $37.23 in morning trading Thursday, while shares of Alcatel-Lucent were up 3 cents to $2.63.