Cloud VARs: HP's Public Cloud Push Better Late Than Never, But Hurdles Abound

"Hallelujah! It's about time" is the response of some cloud computing VARs to HP's late, but inevitable leap into the public cloud arena.

And while cloud computing solution providers say that HP pledging allegiance to the public cloud is a step in the right direction and puts a stamp of validation on the cloud, HP has a tough road to hoe and that road could be a rocky one.

"To me it's kind of a no-brainer for them," said John Barnes, CTO of Model Metrics, a Chicago-based cloud and mobility solution provider. "But it seemed a little bit of a too late to the party."

Earlier this month HP CEO Leo Apotheker broke his and HP's silence and shared its cloud vision with the masses. HP's top dog unveiled a three-pronged cloud attack.

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Apotheker said first, the Palo Alto, Calif.-based company plans to help customers transition to the cloud and build cloud infrastructures and that it is working on a cloud platform, building an open cloud marketplace and prepping a cloud ecosystem.

The second component of HP's cloud strategy leverages the webOS, which HP gained as part of last year's acquisition of Palm. Apotheker said webOS will be a single interface to connect home, mobile and enterprise users via any device and eventually via printers and PCs, along with smartphones, tablets and others.

And third, HP will focus strongly on software to complete its cloud vision.

For VARs and solution providers that were born in the cloud, solution providers who built their businesses around cloud infrastructure and cloud services, Apotheker's and HP's public cloud plans prove that the cloud will soon be the de facto IT consumption model.

"It's a big step forward for the entire industry," said Ryan Nichols, head of product management and marketing for San Mateo, Calif.-based cloud solution provider Appirio.

David Hoff, co-founder and vice president of technology for Cloud Sherpas, an Atlanta-based cloud solution provider, agreed.

"It lends credibility and reinforces what we're seeing on a day-to-day basis that the cloud is the direction the industry is going," Hoff said.

Nichols recalled an industry event not too long ago where former HP CEO Mark Hurd dismissed the public cloud and spread fear, uncertainty and doubt about public cloud offerings. "The attitude was so at odds with cloud computing," Nichols said.

Enter Apotheker, who took over for Hurd as HP's chief executive late last year and whose first major order of HP business was to share HP's cloud vision with the world.

Nichols said as the discussion transforms from what the cloud is and why it makes sense to how companies can leverage it, Appirio and its customers are excited at the prospect of a major IT player like HP getting in the cloud mix. Still, there are reservations.

"We and our customers have a 'we'll believe it when we see it' attitude," he said. "But they're saying all the right things. They're not cloud-washing their data center stuff."

To make it in the cloud space, HP will have to be aggressive. It will have to partner with best of breed cloud players to enhance its existing offerings.

"HP is going to need some help to execute," Nichols said.

Next: HP's Cloud Plans Face Hurdles

And a major hurdle is in shying away from its traditional hardware-focused business and taking a cloud computing mindset to market.

"It's going to be a challenge...the reality is, in their business today there's a lot to lose," he said.

Hoff said that HP's throwing its hat into the cloud ring brings up the old build it versus buy it conundrum, two which HP's traditional answer was always build it. Since HP had the server business and the hardware chops, it was a strong proponent of building out the data center on site to reap the top dollar hardware margins. But the entrance of Amazon, Google and other cloud players turned the build it model on its ear and HP is now playing catch-up.

And HP's jump into public cloud computing raises the question of whether it will cannibalize its own server business. HP's hardware will struggle to compete against the new multi-tenancy, cost and scale that's the cloud introduces, and the slimmer margins could require adjustment.

"It's going to be hard for some of these established companies to do this," Model Metrics' Barnes said, adding that he foresees more cloud market consolidation ahead for larger players like HP to beef up their cloud offerings.

HP faces difficulty in keeping up with companies that have already capitalized on cloud, like Google, Microsoft and Amazon, who have become known for swift innovation and rapid-fire product releases. While HP's product roadmaps typically look three years to five years out and "cloud thinking doesn't have a timeline like that," Hoff said. Roadmaps in the cloud realm are much, much shorter, oftentimes just weeks or months. Hoff questioned whether HP will have the nimbleness and agility to keep that pace or if it will paint itself into a corner.

"Largely, there's a very essential part of HP that has to embrace this in a very direct way," he said. "HP will be challenged to move that fast."

Barnes said HP also faces an increasing competitive field of cloud players, lead by Amazon Web Services, which established the market for cloud computing.

"I wish them the best of luck, but it's going to be hard for anyone to beat Amazon with its massive capacity and scale," he said.

But Nichols said if HP and Apotheker play their cards right, it could be the cloud computing bump the company needs to catch up to the cloud pack and create a real place for itself in a market that's growing exponentially.

"I hope that we'll look back in a few years and compare this moment to Microsoft saying it's 'all in' with cloud computing," Appirio's Nichols said, referring back to when Microsoft CEO Steve Ballmer revealed Microsoft's intention to storm the cloud with a full-court press. "This is HP's 'all in' moment."