Cloudy McCloud Cloud HP just said public cloud 'makes no sense for us'

Exec admits it's no Amazon, Google, or Microsoft


HP has finally conceded defeat in the public cloud wars, admitting that it just doesn't have what it takes to do battle with the likes of Amazon, Google, and Microsoft.

"We thought people would rent or buy computing from us," HP cloud boss Bill Hilf told The New York Times on Wednesday. "It turns out that it makes no sense for us to go head-to-head."

The startling admission comes mere months before HP is due to split into two companies. Come November, HP's PC and printer honcho Dion Weisler will be the new CEO of HP Inc, while current HP CEO Meg Whitman will become chief exec of the newly created HP Enterprise, a company dedicated to serving businesses' data center needs.

Don't expect public cloud to be one of HP Enterprise's major offerings, though. According to Hilf, HP will focus on providing private and hybrid cloud infrastructure to companies, while at the same time acting as a supplier to public cloud providers like Microsoft and Rackspace.

Not that this should come as any surprise to anyone who has been following the nascent cloud market. For all its boasts about operating "one of the world's largest OpenStack public clouds," HP's public cloud offerings have always paled in comparison to its better-established competitors. Gartner's 2014 Magic Quadrant for cloud infrastructure-as-a-service characterized HP as a "niche player," with less ability to execute than Fujitsu or VMware.

HP's real core enterprise business is selling servers, storage, and networking equipment to companies for use in their own data centers. Little wonder, then, that HP prefers to cater to customers that want to build their own clouds, rather than use Amazon's.

HP's got a cloud it wants to sell you

The problem HP faces is that companies who want to build "Google scale" clouds are increasingly turning to so-called white box ODMs to build their servers, rather than buying off-the-shelf kit from big vendors. Amazon hasn't bought a name-brand server in years. And Facebook, through its leadership in the Open Compute Project (OCP), is showing other companies that they don't need major-label expertise to get what they need for their data centers.

Less ambitious companies, however, may not want to go over the financial and logistical hurdles of dealing directly with Chinese manufacturers. For them, HP has come up with Cloudline, a new range of servers with OCP-style specs. But even HP's close partnership with Taiwanese mega-manufacturer Foxconn can't change the fact that the margins on such products must necessarily be razor-thin.

HP's current idea is to sell customers a combination of hardware infrastructure and the software to tie it together. It's even borrowed a buzzword from Oracle to describe these integrated offerings: "engineered systems."

"We had a lot of guys who knew how to sell boxes, and they've had to learn how to have conversations about downloading apps and developing software," Hilf told the NYT. "Meg has put out a charter that will make truly engineered systems that we build top to bottom for customers."

The trouble is, Oracle has struggled to grow its engineered systems business. And while HP has continued to sell industry-standard servers at a healthy clip, revenues for its technology and enterprise services divisions and its software group have been down in recent quarters – suggesting fewer companies think they need HP's help to set up and run their infrastructures these days.

In light of all this, for HP to disavow any public-cloud ambitions should be seen as a good thing for the soon-to-be HP Enterprise. With so many challenges facing it just to get its core business back on track, it will be all eyes on Whitman once the split happens later this year. ®

Similar topics


Other stories you might like

  • Everything you wanted to know about modern network congestion control but were perhaps too afraid to ask

    In which a little unfairness can be quite beneficial

    Systems Approach It’s hard not to be amazed by the amount of active research on congestion control over the past 30-plus years. From theory to practice, and with more than its fair share of flame wars, the question of how to manage congestion in the network is a technical challenge that resists an optimal solution while offering countless options for incremental improvement.

    This seems like a good time to take stock of where we are, and ask ourselves what might happen next.

    Congestion control is fundamentally an issue of resource allocation — trying to meet the competing demands that applications have for resources (in a network, these are primarily link bandwidth and router buffers), which ultimately reduces to deciding when to say no and to whom. The best framing of the problem I know traces back to a paper [PDF] by Frank Kelly in 1997, when he characterized congestion control as “a distributed algorithm to share network resources among competing sources, where the goal is to choose source rate so as to maximize aggregate source utility subject to capacity constraints.”

    Continue reading
  • How business makes streaming faster and cheaper with CDN and HESP support

    Ensure a high video streaming transmission rate

    Paid Post Here is everything about how the HESP integration helps CDN and the streaming platform by G-Core Labs ensure a high video streaming transmission rate for e-sports and gaming, efficient scalability for e-learning and telemedicine and high quality and minimum latencies for online streams, media and TV broadcasters.

    HESP (High Efficiency Stream Protocol) is a brand new adaptive video streaming protocol. It allows delivery of content with latencies of up to 2 seconds without compromising video quality and broadcasting stability. Unlike comparable solutions, this protocol requires less bandwidth for streaming, which allows businesses to save a lot of money on delivery of content to a large audience.

    Since HESP is based on HTTP, it is suitable for video transmission over CDNs. G-Core Labs was among the world’s first companies to have embedded this protocol in its CDN. With 120 points of presence across 5 continents and over 6,000 peer-to-peer partners, this allows a service provider to deliver videos to millions of viewers, to any devices, anywhere in the world without compromising even 8K video quality. And all this comes at a minimum streaming cost.

    Continue reading
  • Cisco deprecates Microsoft management integrations for UCS servers

    Working on Azure integration – but not there yet

    Cisco has deprecated support for some third-party management integrations for its UCS servers, and emerged unable to play nice with Microsoft's most recent offerings.

    Late last week the server contender slipped out an end-of-life notice [PDF] for integrations with Microsoft System Center's Configuration Manager, Operations Manager, and Virtual Machine Manager. Support for plugins to VMware vCenter Orchestrator and vRealize Orchestrator have also been taken out behind an empty rack with a shotgun.

    The Register inquired about the deprecations, and has good news and bad news.

    Continue reading

Biting the hand that feeds IT © 1998–2021