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Can HP Reach the Cloud?

Many have criticized Hewlett-Packard for being late to the cloud. Looking to undo that perception, CEO Leo Apotheker took his best stab at swaying critics, revealing that HP intends to be a major player in the cloud.

Apotheker made his cloud push at the company's annual analyst meeting, dubbed HP Summit 2011, making his first public statements since he became CEO in November.

"We intend to be the platform for cloud and connectivity," Apotheker told analysts. "The opportunities in the cloud are extraordinary and we are positioned to lead with our portfolio and to lead with our customers who need a trusted partner to help navigate the journey ahead."

THINKstrategies analyst Jeff Kaplan points out that while HP has been moving in this direction for some time and boasts a loyal following by SMB and enterprise customers as well as its strong partner network, it faces a bumpy road ahead.

"HP is also burdened with legacy products, both hardware and software, as well as cumbersome business processes," Kaplan wrote in a blog post. "Many of its systems are too expensive. Nearly all of its software is too complex. And, too many of its business processes are too disjointed. So, attacking all of these market opportunities simultaneously in a cost-effective and profitable fashion isn't going to be easy."

Derrek Harris of GigaOM put it even more bluntly: "It's not that HP doesn't have a cloud business, it's just that the business is somewhat less than compelling," Harris wrote. "Essentially, HP has some cloud hardware and management software, as well as some hosted cloud services. It's very reminiscent of IBM's arguably lackluster cloud portfolio, and just seems like an infrastructure vendor tweaking its existing products to suit a cloud-hungry customer base without having any cloud in its DNA."

Pund-IT analyst Charles King echoes those concerns. In a research note, he questioned how HP can differentiate itself against its competitors, notably IBM and Oracle, considering much of it is in line with what they are doing. HP also is reliant on its partner base, much of which could be "irked" by HP's decision to create its own cloud offerings through its services business.

Service providers are a big business for HP and Dell has promised not to compete with its service providers, King noted. "So if you were a threatened SP, which vendor would you choose?" King asked.

Overall, though, King said HP's cloud vision is practical. "It takes good advantage of existing HP solutions and services, and stretches them a bit (but not too much) to pursue emerging market opportunities," he wrote. "As a result, they should satisfy existing HP customers and provide the company a stable position for pursuing new clients and business."

What's your take on HP's cloud strategy? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on March 16, 2011 at 11:58 AM


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