A major feature of HP’s hybrid cloud strategy is ending, as the HP public cloud will be shut down and the company will instead partner with public cloud vendors going forward.
The writing had been on the wall for the HP public cloud, and this week, the wall came crashing down.
Just 17 months after rolling out ambitious plans for the HP Helion cloud portfolio, the company scuttled one of the major tenants of its service and will shut down its public cloud early next year.
The move was first alluded to in April, when Senior Vice President Bill Hilf acknowledged the company couldn’t compete with the likes of Amazon, Microsoft and Google. But HP quickly backtracked and reaffirmed its commitment to public cloud.
Now, it appears the wavering is over.
The decision comes as no surprise, as over the past year, HP has slowly shifted investments away from the public cloud, said Jillian Freeman, senior analyst with Technology Business Research Inc., in Hampton, N.H.
“Speaking with customers, you can kind of get a sense that HP Helion, in the public cloud space, wasn’t taking off,” Freeman said. “They put so much money into it and it didn’t end up meeting expectations.”
HP wasn’t alone in trying to recreate the success of Amazon Web Services (AWS), but it is smart to back away and focus more on the areas it has had success with around hybrid and private cloud, Freeman said. It’s also probably in its best interest to make such a move before the company’s planned split.
“If they do it now, it sends a good message that they’re gearing up for the split and know exactly what they want to do,” Freeman said.
In a blog post, Hilf said the company will shut down HP Helion Public Cloud on Jan. 31, 2016. To help customers transition, HP will rely on existing relationships with AWS and Microsoft Azure, increase integration into other public clouds and help build cloud-portable applications. He also wrote that the company remains committed to hybrid infrastructure, and will “double-down on our private and managed cloud capabilities,” including HP Helion OpenStack, HP Helion CloudSystem, and services for its managed and virtual private cloud offerings.
A minor surprise
While the decision is far from shocking, it does run counter to some of the projections last spring from analyst firms that expected HP to maintain the public cloud, albeit with a smaller footprint.
HP had a strong enough converged cloud story to at least continue offering its infrastructure as a service offering, Carl Brooks, analyst with New York-based 451 Research LLC, said this week.
“I don’t see what it costs them to leave it running and I don’t see where they benefit from walking away,” Brooks said. “They could have at least rebranded it as managed cloud the same way Rackspace did.”
Their public cloud wasn’t keeping up with the big hyperscale players. You have to be really committed to playing this game.
It was ultimately the right decision by HP to shut it down and recommit to its roots and its core corporate data center buyers, said Dave Bartoletti, principal analyst for Forrester Research Inc., in Cambridge, Mass.
“Their public cloud wasn’t keeping up with the big hyperscale players,” Bartoletti said. “You have to be really committed to playing this game.”
It wasn’t a mistake to get into public cloud, but the failure came from keeping the product in beta so long and not being clear with a strategy that said why it was better, faster or cheaper than what was out there, Bartoletti said.
“The mistake from HP was that it sort of waffled for many years on what its cloud strategy is going to be,” Bartoletti said. “Amazon, Azure and Google — these companies are all-in on public cloud and their message is, ‘We want you to run your environment in the public cloud.'”
But the decision doesn’t mean HP won’t have a role in cloud, he added. The company still sells its hardware to large public providers, and helps others build and connect clouds.
“They still have a lot of paths to revenue, but their primary source is the data center and their primary relationships are with customers that run enterprise data centers,” Bartoletti said. “Even though it’s not growing as fast as public cloud, if HP narrows its focus, it can take more of a share of what corporate data centers are left.”