Blog Post

Can HP jumpstart its cloud computing effort?

Updated: Cloud computing has been designated a top priority for Hewlett-Packard (s hpq) which sees its legacy PC, server, and printing businesses under fire. Now it  looks like the company is retooling that key cloud effort, according to a report from Bloomberg News.

A new division, headed by Saar Gillai, is charged with weaving the disparate pieces of HP’s cloud strategy and together, according to the report which cites an internal HP memo as its source. One of HP’s problems has long been that it fields a diverse and sometimes incomprehensible array of products and services. That may have been fine when HP was top dog and could sell anything. Now, that lack of clarity is a serious problem for a company that’s been trying to downsize its way to profitability. (HP will cut 29,000 jobs before October 2014.)

Update: Gillai will report to Zorawar Biri Singh, SVP and GM of HP Cloud Services, according to a CRN report posted Monday night. CRN cited what appears to be the same internal memo.

If true, this news shows that Whitman, who took the helm at HP just over a year ago and initially pledged to stay the course while she sorted things out, is taking charge of this cloud effort.

It’s hard to gauge the take-up of HP’s ambitious cloud effort. It rolled out the public beta of its OpenStack-based cloud in May but things have been quiet on that front since. That is probably not good news

HP has been hurt by what can only be called a dysfunctional board, a series of strategies and CEOs that are introduced then jettisoned, and what some say is a counterproductive dependence on Microsoft(s msft). It’s hard to tell at this point whether tweaking its new cloud strategy is the right thing to do or just another stopgap measure.

Feature photo courtesy of Shutterstock user  drserg

13 Responses to “Can HP jumpstart its cloud computing effort?”

  1. I’ve long said I don’t understand HP’s cloud strategy and how they plan on not cannibalizing their hardware business in the process. HP is in the position to offer a private IaaS in a box that lends itself to it’s public cloud offering. Their OpenStack cloud seems rushed in that they don’t have a complementary private cloud solution for their traditional enterprise customer that they already know well today.

  2. Barb. You should check every so often. HP isn’t the only one with ‘issues’ developing Cloud business.Cisco’s losses on its VCE investment continue to grow. 2010-$3m, 2011-$76m, 2012-$160m. Their cumulative losses on the VCE investment are now Cisco = $239m @ July 28th 2012 and EMC = $368.3m @ June 30. In July EMC funded VCE an additional $111m

  3. Dan Belcher

    Shouldn’t ES/EDS be a huge asset here? They could focus on ES as the first and best customer for an enterprise-grade cloud offering–where cloud economics and agility should help them win and extend margins. Then they could use the volume from ES to get the type of scale that we see with the other cloud providers and finally double down on a broader offering? As I understand it, this would be similar to the AWS formula (where was customer #1) and even closer to IBM’s current strategy (of course the jury is still out there as well).

  4. If talking about MS Azure, be sure to differentiate whether you mean it’s new IaaS offering or not. Its IaaS variant might be attractive to the same Windows-bias target market that HP will orient to naturally.

  5. Mikel Kirk

    BTW, the internet bandwidth and latencies available to my HP Cloud VM instances was nothing short of amazing. If they can keep that up in production that would be remarkable, but it was nice to have at the time during the beta. I would share metrics, but NDA and all that…

    It was nice also to enjoy an HP net address. In case you don’t know, HP is a rare company with two /8 internet address groups. They completely own all 15.* (HP) and 16.* (DEC) IPV4 addresses, and maybe others. Those two represent almost 1% of all the IPV4 Internet addresses there are. 33 million addresses. Servers on some /8s are discounted, but not HP’s yet. So your VM can enjoy a globally unique IPV4 address still, which is a service which will become rare any day now.

    HP should probably make more of this IP address availability feature than than they have yet.

    /No, I don’t work for HP. In fact, they don’t even like me today. Not sure why, since I’m a big fan.

    • Shameer Mulji

      Hi Mikel,

      In a previous post, you called Microsoft’s Azure effort lame. I was curious to know why that was. They seem to be putting a serious effort behind going all cloud.

    • Hello Mikel,
      as Shameer Mulji wrote, I would also like to get more info about, why the “lame MS Azure”, cause I have the same feeling, MS might be doing it right, so just curious, if you have some more specific information/experience. Thanks.

  6. Mikel Kirk

    I was in the beta for HP’s cloud effort and it’s a credible effort. They definitely have the customer support thing down solid as they aggressively pursued every possible way to service me when I had troubles of my own making and got them fixed as soon as we made contact. I have no complaint about the level of service, the quality of VMs, the bandwidth or any other thing. It’s good stuff.

      • Mikel Kirk

        If you try and make sense of HP reorgs you’re just going to go crazy. There is no sense to this one, and there was no sense to any of the others. They know they need to reorg, but don’t know to what. So they fire random people, make a mess, and try to congeal the remainder and move forward. When that doesn’t work, they do it again.

        In my spot in an ISV i’ve seen one friend go leave us to go to HP and achieve great heights, and another go there and do less well. HP steals our people all the time. In my opinion it was the one less capable who achieved great heights in the HP org, because he was persuasive and had better people skills, rather than the one more grounded in technology and skilled in the art. That tells me all I need to know about where HP is headed.

      • Mikel Kirk

        I neglected to answer the question, sorry. Of course HP is unhappy with the level of interest. There isn’t a level of interest that would make them happy except “all of it”. In the cloud VM space they’re competing against entrenched VM hosts, so every new customer is a win. They know they’re not going to defeat Amazon’s compute cloud on the first day, nor even Microsoft’s lame Azure. It’s a new service for them and they’re ecstatic to get every new customer. HP is going to service every new customer far beyond even what they want until they reach some indefinite level of market penetration where they can back off the service to some more reasonable profitable level. As a beta tester the response time was scary fast: they hunted me down by email, phone, fax, text, chat, whatever it took to get the ticket closed in the shortest time, and tier 3 (developer engineer) support was the default, easily escalated to tier 4: direct interaction with the engineer responsible for the function. For now for HP it’s all about the customer wins, whatever the cost, and they are winning customers.

        How they’ll do when this is a milk run is an entirely different question, but for now HP is putting their best foot forward.

        I haven’t quite put it this way here before so: I recommend HP Cloud, here in my right name. For now.

        /I still don’t work for them. I do sometimes sell HP stuff amongst a vast catalog of other things. My opinion is my own, and nobody paid me to say this.