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HP and Dell dominate server market but struggle in cloud

HP and Dell are the largest hardware makers, but the two companies struggle to present strategies that portray them as serious cloud players.

Hewlett-Packard and Dell dominate the PC and server hardware markets and both vie to be serious cloud vendors, but their complex cloud strategies may confuse prospective IT customers.

Part of the problem, sources say, is that HP and Dell haven’t offered a consistent cloud message.

"HP and Dell [cloud strategies] keep changing over the past year," said Kyle Hilgendorf, an analyst at Gartner Inc., a research firm based in Stamford, Conn.

That could be because "neither one of them has found the magic bullet," said Carl Brooks, an analyst for infrastructure and cloud computing at Tier1 Research, a division of 451 Research, based in New York City.

Making sense of HP and Dell’s cloud strategies
HP, for instance, has a number of platforms and services labeled “cloud.” The company’s latest attempt to bring clarity to its jumble of cloud services and products is HP Converged Cloud -- a superset of the HP CloudSystem introduced last year.  

Dell has been very clear while HP has proceeded in fits and starts.

Charles King, principal analyst at Pund-IT Inc.

CloudSystem is essentially a collection of interconnecting HP products that are cobbled together to provide cloud capabilities. Similarly, the new HP Converged Cloud brings together HP Converged Infrastructure, HP Converged Management and Security, Converged Information and OpenStack technology, according to the company’s news release.

The Converged Cloud release roughly coincides with the beginning of the public beta test this month of HP Cloud Services. The services, which have been in private beta since late last year, include HP Cloud Compute and HP Cloud Object Storage.

Meanwhile, some say Dell’s cloud strategy has surpassed HP’s and believe that Dell offers a clearer cloud message.

"Dell has been very clear while HP has proceeded in fits and starts," said Charles King, principal analyst at Hayward, Calif.-based corporate advisory firm Pund-IT Inc.  

Like HP, Dell has a number of offerings with the “cloud” label, including a Dell Cloud based on VMware vCloud Datacenter Services,  its Boomi cloud integration service, the Dell Cloud Business Applications portfolio and more.

Additionally, Dell made two strategic purchases in the last two years -- a highly-virtualized storage software vendor called Compellent Technologies followed by the buyout of data center networking firm Force10 Networks.

"The big thing that's changed for Dell is with the Compellent and Force10 acquisitions, they have a broad product set for customers that want to build cloud data centers," King said. "They have had servers and networking [that are] very scalable and have an Infrastructure as a Service (IaaS) story as well."

Meanwhile, both Dell and HP pin their clouds on the open source OpenStack public cloud platform. (OpenStack Version 5, codenamed "Essex," shipped last month.) HP and Dell also support VMware Cloud Foundry.

Though Dell may offer a clearer cloud vision than HP, both companies' cloud messaging is still too complicated, Brooks said.

And while Dell trumpets its cloud offerings, it is still mostly a hardware company.

"[Dell] isn't an enterprise cloud/stack-in-the-box provider yet," Brooks said.

The hard(ware) conundrum: HP or Dell’s cloud services?
IT shops considering HP or Dell cloud platforms and services will probably base their decision on hardware preferences, industry experts say.

"The cloud has been about x86 [computers] from the very beginning and that helps [HP and Dell] immensely," King said.

[Dell] isn't an enterprise cloud/stack-in-the-box provider yet.

Carl Brooks, analyst at Tier1 Research

For example, even though Brooks characterized Dell's approach as "throw it up against the wall and see if it sticks," he favors Dell over HP because he prefers PowerEdge C class servers.

In other cases, timing matters more than hardware preferences.

Server Cloud Canada in Kingston, Ontario, gave HP CloudSystem a chance when it sought cloud services two years ago, even though HP’s cloud plan “is hard to understand," said Kevin Moniz, CTO of the company, which provides cloud services as well as managed and colocation services built on HP’s cloud.

At the time, HP presented more cloud offerings than Dell, Moniz said.

"We were a full-blown Dell shop but [Dell's] offering at the time was just pieces [so] we made a hard left turn to HP," he said.

But when The University of Kentucky in Lexington, Ky., sought a cloud service about a year and a half ago, Dell had the most complete offerings for what it needed, making it the winner.

The university, which relies on IBM hardware, chose Dell because it offered cloud products that let them run SAP AG’s enterprise resources planning (ERP) system on an on-premises data center deployment -- bursting out onto Dell's cloud when necessary, said Vince Kellen, CIO for the university.

Stuart J. Johnston is Senior News Writer for Contact him at

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