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Will HP's split get its cloud train on track?

HP split into two companies with the hopes of getting back on track. But its issues in the cloud run deeper than reorganization.

HP confirmed it will split into two companies: HP Enterprise will focus on enterprise services and software -- including cloud services -- and HP Inc. will focus on PCs and printers. Watching HP try to grow its cloud services is like watching a train wreck in slow motion. So can the HP split stop this locomotive catastrophe?

The company struggled for years under the misguided leadership of three CEOs: Carly Fiorina, Mark Hurd and Léo Apotheker. And the struggles continue with the hiring of Meg Whitman. Therefore, the spinoff won't make a big difference.

When things get rough for large technology companies, the first thing that comes to mind is reorganization. HP's split is the mother of all reorgs, except with the same people and processes in place. Not much will change -- other than increased confusion among employees.

Where's the HP customer love?

When you take a close look at HP's cloud technology, it's not bad. HP is one of those companies with good technology, but a bad marketing machine. No one asks for HP anymore, despite it being a sound technology. Why is that?

One reason is a lack of interest in OpenStack.

HP moved to OpenStack early on and remains a major contributor. Recently, HP overtook first-place Red Hat in code contributions to OpenStack, according to the website Stackalytics.com, which tracks companies that contribute code to the open source project.

However, OpenStack hasn't set the world on fire. Its market size will cross the $1.7 billion threshold by 2016, according to 451 Research. While that sounds like a lot, consider the number of providers that will share that money -- and then consider the fact that the cloud computing market, as a whole, will account for $20 to $30 billion in 2016, depending upon which analysts you ask. So, even if HP is half of the OpenStack number, which it's not, it won't even be a blip on the cloud computing radar.

Follow the HP split from all angles:

HP splits to keep pace with changing IT

HP split leaves the PC on its own

CIOs respond to the HP split

HP Helion, which was announced at last year's OpenStack Summit, does hold some promise. It's a cloud platform that consists of hardware, software and services hosted in the private, public and hybrid cloud. Even though it's interesting, Helion lacks a game changer to draw interest from HP's real cloud targets: Google, Amazon Web Services and Microsoft.

HP's prognosis: More of the same

So, what's the outlook for HP? First of all, the split won't bring much change. The path for the printer and PC portion won't be easy, thanks to a shrinking demand for those products. In addition, HP Enterprise will continue to struggle. HP needs more of an innovative move and less of a reorg.

HP has been more of a follower than a creative force in the cloud space. Unless it can build something new and compelling for the emerging world of cloud computing, it certainly won't meet the company's initial expectations.

About the author:
David "Dave" S. Linthicum is senior vice president of Cloud Technology Partners and an internationally recognized cloud industry expert and thought leader. He is the author or co-author of 13 books on computing, including the best-selling Enterprise Application Integration. Linthicum keynotes at many leading technology conferences on cloud computing, SOA, enterprise application integration and enterprise architecture.

His latest book is Cloud Computing and SOA Convergence in Your Enterprise: A Step-by-Step Guide. His industry experience includes tenures as chief technology officer and CEO of several successful software companies and upper-level management positions in Fortune 100 companies. In addition, he was an associate professor of computer science for eight years and continues to lecture at major technical colleges and universities, including the University of Virginia, Arizona State University and the University of Wisconsin.

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This was last published in October 2014

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Well, the HP split will take a year or so to complete and the jury will be out on how it is working for a while. It may make sense from a shareholder value point of view to split the business but otherwise its just a lot of work for maybe not much to talk about. Yes, HP has taken a long time to develop a cloud strategy and go-to-market plan. HP was not a prime mover in the public cloud space like AWS, Google and more recently Microsoft, so it had to set its sights on enterprise private cloud which if you are contributing to OpenStack is certainly a work in progress. It remains to be see if HP can pull in a lot of their enterprise customers into their private cloud offering. It would seem like a natural market for them but maybe then need to do something more dramatic in the short term to shake things up, like their rumored $6B to $10B acquisition of "you fill in the blank" and see if you are right. Of course surrounding all the big reorganization and rumored mega acquisition are the continued layoff of HP employees which makes all of this hard to see a happy ending in it for HP. .
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