​HP drops out of the public cloud storm

HP has invested billions in its cloud offerings. Now, out of the blue sky, HP is leaving the public cloud business behind.
Written by Steven Vaughan-Nichols, Senior Contributing Editor

Almost five years ago, HP announced it was going to offer cloud services. On April 7, according to the New York Times, HP announced it's leaving the public cloud business.

The public cloud is still a big business, but it's not one that HP will be competing in any longer.
HP's cloud plans have changed several times over the years. In its most recent incarnation, with its Helion enterprise cloud, HP aimed to compete with the public clouds of Amazon, Google, and Microsoft. Helion is composed of a mix of HP server hardware, the open-source OpenStack cloud, and its recently acquired Eucalyptus cloud.

In September 2014, Bill Hilf, HP's Senior Vice President for HP Cloud, told ZDNet that HP -- having announced cloud partnerships with VMware, Microsoft, CloudStack and OpenStack -- was now focusing on OpenStack. The reason? HP was tired of being seen as an industry follower and the company would now focus on a vastly accelerated cloud strategy.

In April 2015, Hilf told the New York Times. "We thought people would rent or buy computing from us. It turns out that it makes no sense for us to go head-to-head."


This comes only six months after HP CEO Meg Whitman announced that the venerable Silicon Valley giant was going to split into two companies. At least part of the reasoning at the time for this move was that HP Enterprise could become a public cloud power. So much for that idea.

That's not to say that HP is entirely abandoning the cloud. It's not. HP will still be selling its Helion Rack for integrated private clouds; its hyperscale Cloudline and Moonshot servers; and a variety of private and hybrid cloud offerings. It's just that HP will no longer try to battle it out with Amazon Web Services and the like.

This move comes after HP's fiscal 2014 earnings saw its revenue decline 2 percent year-over-year, with earnings down 1 percent year-over-year. In its first 2015 quarter, HP's non-GAAP earnings were down five year-over-year; the cost of splitting up the company is higher than expected, and earnings were well below Wall Street expectations.

In the light of HP's quick decision to leave the public cloud market, HP is indeed becoming a fast-moving company -- a company that, in the face of disappointing results, is quick to leave a market when it doesn't look profitable.

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