HP rebuffs public cloud market exit reports

Hardware giant reinforces commitment to public cloud, but analysts claim it needs to be clearer about its off-premise strategy

HP has dismissed reports that it’s planning to exit the public cloud market, after one of its senior vice-presidents admitted the supplier has given up trying to compete with the likes of Amazon, Google and Microsoft.

According to a New York Times report, HP thought it would be battling it out with the aforementioned public cloud giants for market supremacy, but things didn’t work out that way.

To back this point, HP senior vice-president of cloud product management, Bill Hilf, is reported to have said: “We thought people would rent or buy computing from us. It turns out it makes no sense for us to go head-to-head.”

The comments have been seized on by some quarters of the tech industry as an admission the technology giant is giving up on the public cloud market – a point of view HP has been quick to correct.

In a statement to Computer Weekly, the company said: “HP is not leaving the public cloud market. We run the largest OpenStack technology-based public cloud in the US. This has to do with not competing head-to-head with the big public cloud players.”

According to CEO of IT analyst firm ITCandor, Martin Hingley, this isn't a bad strategy considering the financial performance of the public cloud market's major players.

“They aren’t making much profit, nor is Salesforce.com or Rackspace,” he said. “Avoiding direct competition with the big public cloud suppliers stops HP from joining the race to the bottom.”

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Meanwhile, programme director in the European software and infrastructure research team at market-watcher IDC, Carla Arend, said Hilf’s comments are simply echoing what HP has been saying about its position in the market for some time now.

“The fact that HP is not competing in the public cloud is actually not a new thing. It’s something they proclaimed at least 18-months to two-years ago,” she said.

Instead, the company has been focused on supplying the cloud provider community with the technology infrastructure they need to create their off-premise services.

“They’re really pushing hard in that direction, providing a whole datacentre infrastructure to cloud providers that allows them to compete with the likes of Amazon and Google,” said Arend.

However, that's not to say the company may not have a stab at taking on the public cloud behemoths directly later down the line, according to research vice-president for Europe at IT market-watcher Everest Group, Sarah Burnett.

"Public cloud has been dominated by a handful of cloud operators for a long while," she said.

"We've seen another computing giant, IBM, acquire SoftLayer to compete in this market, and there is nothing to stop HP from making an acquisition if it really wants to compete in the public cloud too."

Clearer cloud strategies

The fact HP had to issue a denial about its supposed exit from the public cloud sector suggests the firm needs to do a better job of communicating what it’s doing in the cloud to users, it has been claimed.

Particularly, as Quocirca service director Clive Longbottom pointed out, because the firm has had so many abortive attempts at making a name for itself in the cloud already.

“HP has had as many bites at the cloud cherry as it is possible to have. From early attempts to build proprietary 'enterprise clouds', through Moonshot and Helion, it has been trying to come to terms with what cloud means to itself,” he said. “And, on the whole, it seems to have failed.”

One area Hingley, Arend and Burnett said HP should be concentrating on is making a bigger splash about its Cloud28+ initiative, which is geared towards helping boost adoption of off-premise services within the 28 member states of the European Union.

It aims to achieve this through the creation of a federated catalogue of cloud services that users across the continent can use. The initiative was formally launched by HP in March 2015 after nearly a year in the works.

“It needs to show it has something special for communities of business in the cloud, such as Cloud 28+, before everyone adopts cloud and it isn’t that special anymore,” said Hingley.

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