May 08, 2014, 2:13 PM — Hewlett-Packard hopes its focus on private clouds -- and it's investment of muscle and money in the technology -- can convince enterprise IT executives that it can provide a secure way to enter the fray.
Three years after it vowed to become a major cloud vendor, HP Wednesday unveiled Helion, a set of products and services designed to help enterprises set up private clouds, and disclosed that it's using OpenStack, a NASA-derived open source cloud operating system.
HP executives yesterday also committed to investing more than $1 billion over the next two years in research and development to extend the Helion portfolio, and build new cloud new data centers and staff them up.
"We are living in a period of enormous change," HP President and CEO Meg Whitman told reporters yesterday. "Open source is enabling an entire industry to build solutions that solve problems. The result is something that is more flexible and secure than any company could deliver alone."
HP is targeting Amazon, Google, IBM and Microsoft - companies that are already strongc cloud players. The company says its focus on private clouds, and thus on security for large enterprises that want to take advantage of the cloud's scalability and other features, and be able to touch and look after their own data, will provide a competitive edge.
At this point, there are plenty of vendors that can help enterprises build their own cloud system, but most are small, new businesses. HP believes it has an advantage as has a tech industry giant. But now it's a big player in a still relatively small pond.
"Server huggers will be interested in this," said Gartner analyst Lydia Leong, referring to "those organizations that want to build and run things themselves. IT administrators may have objections to the public cloud. They don't trust what they don't control. There are reasons to build it yourself."
By spending $1 billion on its cloud effort, HP definitely is gearing up to be a major player, though already established cloud vendors, like Google and Amazon have been spending that kind of money -- more, actually -- for some time now.
Jeff Kagan, an independent industry analyst, said HP's $1 billion expenditure is probably only 20% to 25% of what Google and Amazon are spending every year on their cloud businesses. Nonetheless he said the HP cloud plan could be a threat to those companies.
"It's a threat to everybody," said Kagan. "Every move that every competitor makes at this point is a threat because you don't know who will be leading a year from now or five years from now. There are a lot of companies getting in the cloud."
"This is a matter of what do companies want? Do they want to set it up on their own? Do they want to just rent space and have someone else take care of it? There's no right or wrong. It's just a different approach," he added
A lot of enterprises will base their decisions on which solution can significantly cut their anxiety about cloud computing performance, security and other issues.
A recent study by IHS showed that 73% of IT executives believe cloud providers are hiding performance problems.
"The enterprise IT folks are being very, very cautious about their migration to the cloud," Jagdish Rebello, an analyst with HIS, recently told Computerworld. "They see the cost benefits but when they look at reliability and security, there is essentially a fear of going there wholeheartedly."
HP hopes those IT executives will show a big interest in going to a cloud they can control.
"I think the big enterprises, particularly the Fortune 500s, will be looking at this architecture," Rebello said today. "It's a play for them to go into the private cloud. They're concerned about the security of their data being on somebody else's servers, so they are going to be more interested in the private cloud."
This is a different play into this market, as opposed to what Amazon or Google offers. If you look at this market you see HP trying to reinvent itself," Rebello added.
For any enterprise IT shop, the private cloud can offer advantages. The company controls its own security with a private setup, and IT knows exactly where it's data is sitting. The IT operation has complete control of the systems.
A private cloud, though, will also require regular investments, noted Rebello. The owners will have to hire people to run it and will be responsible for system upgrades, virus protection and other security issues -- and any other major problems when they happen.
"It's a question of control versus cost," said Rebello.
He did note that HP's use of OpenStack should make the offering more attractive to IT administrators.
"I think the fact that HP is embracing OpenStack makes the IT guys think that what they create for this system can be migrated to other systems because it's open source," said Rebello.
"It's not proprietary for HP anymore so they can migrate it to other architectures. They see the benefits of open source and the benefits of having security of a private cloud and the security of having a big player like HP helping them with their solutions," he added.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is firstname.lastname@example.org.
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