What HP Gains In Eucalyptus Cloud Deal - InformationWeek

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What HP Gains In Eucalyptus Cloud Deal
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User Rank: Ninja
9/26/2014 | 12:09:15 AM
HP has a lot of marketing plans for this cloud deal with Eucalyptus
Personally I think that gives HP immeasurable open source credibility. It makes a lot of strategic sense in fending off other cloud service providers such as IBM and AWS. It is good for HP as CEO Marten Mickos of Eucalyptus will be head of HP's cloud services and will be answerable to Meg Whitman, HP chief.
Charlie Babcock
Charlie Babcock,
User Rank: Author
9/15/2014 | 6:26:06 PM
The start of unbounded spending... Maybe.
GoFarley, you make a series of strong points and I think you are mostly on the money. I agree that HP can make hay by integrating current enterprise operations wtih the cloud and it is potentially good at that. You leave out one point: few parties are more trusted to perform the integration task than HP. I think it's wise to take a largely open source code route and you sort of assume it will need to integrate a lot of open source developers into that process through acquisitions. Yes, but don't rule out HP developing expertise in the open source, and contributing to projects of interest without acquisition. If it can offer its integration skills as expertise on top of that of the enterprise developer and IT staff, that may be enough. Also correct, Amazon, Microsoft and Google are not particularly good at it. In addition, Mickos is skilled at building strength, even when starting out with a weak hand.
User Rank: Apprentice
9/15/2014 | 1:22:18 PM
The start of unbounded spending for HP
HP clearly has to do something to be relevant to cloud customers. Between virtualized servers, hyper-convered platforms (think Nutanix and Simplivity) and big online companies building their own platforms, HP's high margin infrastructure business is getting squeezed out of the fastest growing enterprise markets. They failed at mobile, so they have to make a big bet on cloud.  Give them credit for doing what they can, but it's going to be extremely difficult. Amazon does whatever it can to buy market share.  Microsoft can still print money to fund Azure and Google's advertising revenue can fund cloud development forever.  HP is starting with a huge economic disadvantage where cloud investements are concerned.

How does HP, coming late to the game compete with that?  By integrating its cloud offerings better than the Amazon, Microsoft and Google and by making it easy for customers to understand what to do, how to do it and what it will cost. None of the big three in cloud are particularly good at that and seem to have cultures that prevent them from getting there. That's HP's best path to success.

The problem is that HP is going to have to do this through acquisition and that is going to be expensive. As they acquire companies and the talent inside them, they are going to have to make it all work together, which is always far more difficult than it initially appears. It's hard enough getting employees working under a single roof to integrate technology, but HP appears to be thinking about herding cats from open source software - a messy entangled process that has very little chance at succeeding.  There is a chance, but it is going to cost a lot and will probably depend on serious mistakes being made by Amazon, Microsoft and Google. 

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