HP's Whitman: Cloud Is $3 Billion Business With 20 Percent Growth Rate For HP Enterprise


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Hewlett-Packard CEO Meg Whitman Tuesday told Wall Street analysts that HP's new Fortune 50 enterprise company is hybrid-cloud-strong with a $3 billion cloud business that will grow at a 20 percent clip annually for the next several years.

"Cloud is a large high-growth business which we are monetizing across the entire Hewlett Packard Enterprise portfolio," said Whitman, providing the first cloud sales forecast for the new $52.7 billion enterprise business, which will officially launch Nov. 1. "We have a very clear point of view that hybrid infrastructure is the future and the environment that best meets the needs of our customers around the world. We are really well positioned."

Citing Bain & Company market-research data that puts the compound annual growth rate for private cloud at 24 percent over the next three years vs. 17 percent for public cloud, Whitman said the hybrid cloud market is a much larger and richer opportunity than the public cloud market.

[Related: HP Enterprise Shifts Thousands Of Accounts To Partners, Will Not Pay Direct Sales Force For SMB-Midmarket Deals]

The HP hybrid cloud offensive is a slap in the face of sorts to cloud services giant Amazon Web Services, whose $7.2 billion annual run rate public cloud business grew at a whopping 81 percent in the most recent quarter. Amazon Web Services' operating profit, meanwhile, was 21 percent in the most recent quarter, up from 17 percent in the preceding quarter.

Whitman said HP plays across the full enterprise hybrid cloud stack with its strategic consulting, servers, storage and networking, and software offerings. She pointed to an HP cloud outsourcing deal with Seadrill Management Limited, a global offshore oil and drilling supplier, as the kind of rich opportunity that makes HP a strategic partner of choice for cloud.

As a part of a headquarters move from Norway to the United Kingdom, HP won the contract to move Seadrill Management Limited to a managed virtual private cloud with 32 mainstay applications moving to that cloud in less than six months. "This platform accommodates all of the company's business-critical corporate applications and data within a secure environment without the high cost of owning and managing its own data center," she said.

HP is also managing hundreds of servers for Seadrill in other IT environments, including 56 servers on oil rigs across the globe. "We differentiate by being an end-to-end partner for large enterprises like Seadrill not just one point of their overall IT solution," said Whitman. "This gives you a flavor for Hewlett Packard Enterprise's capabilities and how we benefit financially from shifts to the cloud."

Mike Strohl, CEO of Concord, Calif.-based Entisys, No. 227 on the CRN 2015 Solution Provider 500, said he sees a dramatic shift with more customers moving from public cloud to private cloud as they map out a long-term strategic cloud road map.

"Customers are getting more strategic with cloud and looking at the overall cost and delivery of services with hybrid solutions and workloads," he said. "Customers that were spending a lot of money on public cloud are starting to look at HP's Flex Capacity offerings. Before, those customers didn't have a choice. Public cloud was a one-size-fits-all offering. Now they are taking workloads from public cloud and moving them to private cloud."

Strohl compared the flight to private cloud to the shift that took place when customers started aggressively evaluating storage capacity, moving data from a standard tier-one offering to tier-two and tier-three storage offerings based on the business-critical nature of the data.

Overall, Strohl said he sees Hewlett Packard Enterprise driving much more aggressively into the private cloud market with the Nov. 1 split. "This is going to make Hewlett Packard Enterprise much more agile and allow them to be more competitive and innovative going forward," he said.

Kelly Ireland, founder and CEO of Orange, Calif.-based CB Technologies, an HP Platinum partner, said she also sees corporate customers moving aggressively to private cloud. "Meg is right," she said. "Private cloud is the much bigger opportunity. It is targeted squarely at the corporate customer. We expect our cloud business to double over the next year."

PUBLISHED SEPT. 15, 2015

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