Theophilus London plays at the HP Party at the OpenStack conference last month in San Francisco. Will HP be a cloud mega-star? Have your say, below. Photo: Alexander Haislip
Most people don’t realize that there are two HPs in Silicon Valley.
There’s the one you know from the news, plagued by scandals such as journalist spying, Russian bribery and that whole Mark Hurd thing. The one that appointed a CEO nobody interviewed who tried to scrap its flagship business. The big, old behemoth.
But as HP prepares for the May 10 launch of its public cloud and HP Cloud Services, people are going to start noticing the other HP.
The other HP closes the biggest contracts to be had and books ridiculous revenue by making large corporations and governments very comfortable with a new technology and pulling them into the future.
That’s critically important for the future of cloud computing. HP has the power to dramatically accelerate and widen the adoption of both private and public cloud computing. And with that will come a whole new set of customer needs. Whether that’s the need for integration over point-solutions, or the need for management of stateful machines instead of bring-it-up and burn-it-down instances. HP Cloud Services is not going to put Amazon and Rackspace out of business. HP is going to get the business Amazon and Rackspace can’t get.
Need proof? Consider the quarter of a billion dollar contract HP closed along with General Dynamics to provide private cloud solutions for the U.S. Army earlier this month. There’s no one else in technology, save IBM, that could have earned that business. The other HP is full of “elephant hunters” who know how the system works and have made careers of working it.
HP has the services and consulting pieces of the puzzle that big businesses, government agencies and other elephantine accounts need to feel comfortable with this whole cloud thing. That’s not a capability that other IaaS providers have developed, let alone practiced for the past 40 years.
Forget Innovation, Focus on Revenue
Few folks understand what’s going on with the cloud industry as well as GigaOm’s Derrick Harris. Yet even he’s missed the significance of HP offering infrastructure-as-a-service (IaaS). He wrote:
I just have a general feeling of disbelief that in a cloud world advancing so fast in terms of openness, portability and capabilities, many companies will invest in a cloud strategy that’s HP up and down the stack; there’s just too much innovation going on elsewhere.
It’s a sentiment echoed by other cloud pundits, including the usually spot-on David Linthicum, who wrote:
HP’s foray into cloud computing at this point equates to more of a “me too” strategy than an innovative or game-changing proposition…. The problem is that the IaaS, PaaS, and Big Data ships have sailed. Although few people doubt that HP can get some sort of offering to market, the chances of pulling even with the existing providers (such as IBM, Google, Amazon, and even Microsoft) are pretty slim — even with a buy-versus-build approach.
But HP doesn’t need to have cutting edge products to win business. Its customers are more concerned with getting into the cloud than being first to have an esoteric new feature. They want safety and stability, not performance and techno-bragging rights. Think reliable Volvos, not temperamental Ferraris. They like working with a trusted partner that can pull all the pieces together for them.
And that’s where the money is. Companies in the early majority and late majority of technology adoption control a disproportionate amount of annual IT spending. HP can effectively ignore the feature-obsessed early adopters and go straight to the big, juicy accounts.
Leveraging Learning to Leapfrog
Whether it was an intentional strategy, or simply a byproduct of the behemoth’s glacial pace doesn’t seem to matter when you consider the advantageous position HP finds itself in.
First off, it can pick the platforms it thinks will win. HP decided on OpenStack and can leverage the $4 million to $5 million Rackspace has been putting into the open source project annually. Waiting for OpenStack to mature to a point of scalable usability helped save HP from getting locked in with a single vendor. And its decision to support the project by both contributing code and using it as the basis of its IaaS have helped put Citrix on the defensive with respect to its own open source CloudStack.
Second, HP has witnessed the mistakes other companies have made with their cloud deployments and does better. Consider its move to include a block storage component, plans for which were leaked to the press last year. That’s no casual bit of coding to get right, but you can be sure the HP engineers will work double hard after seeing how the Elastic Block Storage took down Amazon’s Web Services a little over a year ago.
And for each such learning experience that we know of, there’s likely a dozen more that HP engineers will be aware of as they build out the service. HP is poised to leapfrog years of development and painful mistakes by learning from others.
The Big-Game Future
HP’s entry into the public cloud market marks a critical milestone in cloud computing. The company’s powerful sales and services team will help take the cloud across the chasm and into the IT operations of large enterprises. It will change the nature of the discussion about cloud capabilities away from the simple build, deploy and scale features that social gaming and web2.0 companies need to the automating, patching and management needs of traditional big businesses. One thing is for sure, HP may be the first of the IT titans to enter the cloud arena, but it won’t be the last.
Disclosure: ScaleXtreme is a cloud-based server automation product that manages servers across multiple public clouds. We work with HP Cloud Services as a partner.