This content is part of the Essential Guide: Legacy IT vendors transform to survive the mobile, cloud evolution

Essential Guide

Browse Sections

HP undercuts Rackspace on OpenStack IaaS price

HP made its first public cloud service generally available this week, with prices and an SLA that may intrigue Amazon and Rackspace IaaS users.

HP has taken the wraps off its first public cloud computing service with an aggressive price and SLA that compete with Rackspace and Amazon.

Prices for Hewlett-Packard's (HP) Cloud Compute service start at four cents per hour for a small instance with 1 GB of RAM – 2 cents lower than the price for Rackspace's 1 GB instance. Amazon Web Services' (AWS) Reserved Small Instance, which comes with 1.7 GB of memory, costs 3.9 cents per hour.

It looks to me like HP's killing Rackspace [on price] right now.

Boyd Hemphill,
chief systems architect, FeedMagnet LLC

While AWS still offers the best deal, HP's pricing for the fledgling service might attract Rackspace customers.

*Pricing information update available as of December 12.

"It looks to me like HP's killing Rackspace [on price] right now," said Boyd Hemphill, a Rackspace customer and chief systems architect for social media aggregation service provider FeedMagnet LLC. "I'm eager to get in there and try it out."

For larger FeedMagnet customers who would use the 1 GB server instance, the cost difference would be more than $10 a month. HP's Cloud Compute would come to $29.20 per month, as opposed to Rackspace's $43.80.

Not every customer of FeedMagnet needs the full gigabyte of memory, however, Hemphill said, and for those customers, he prefers Rackspace's 512 MB instance, which costs $16.06 per month.

Meanwhile, HP still has to establish its reputation as an Infrastructure as a Service (IaaS) provider. One IT manager at a quick-service restaurant company based in the Northeast said HP remains an unknown quantity in that regard. "I might consider alternatives when my current contract with Verizon's Terremark expires," the IT manager said, speaking on condition of anonymity. But he's more likely to go with a provider ranked on Gartner Inc.'s Magic Quadrant for cloud service providers, he said. "Rackspace is one of them -- they're highly rated," he said.

HP's OpenStack-based Cloud Compute will allow portability of workloads into and out of other OpenStack clouds on demand, HP claims.*

HP Cloud Compute SLA, free trial gun for Amazon EC2

HP hopes its Cloud Compute service-level agreement (SLA) will help it catch up to such providers as AWS in the public cloud IaaS market. HP's Cloud Compute SLA calls for 99.95% uptime on a monthly basis. AWS also offers a 99.95% SLA, but for a yearly period.

This means that cumulatively, HP's service could be down for only 21 minutes per year, whereas AWS has more leeway with up to four hours' downtime per year, according to a blog post by Gartner analyst Lydia Leong.

These cloud SLAs might sound good on the surface, but buyer beware, according to Leong.

"It's a tossup which SLA is worse," she wrote. "HP has a monthly credit period and an easier claim process [than AWS], but … that's totally offset by HP essentially defining an outage as something impacting every [Availability Zone] in a region -- something which can happen if there's an AZ failure coupled with a massive control-plane failure in a region, but not otherwise likely."

Like AWS, HP also offers a free usage tier for Cloud Compute, but its free offering is capped at 1,000 hours as opposed to AWS's 750 hours. HP's free trial period ends after one month, while AWS offers its free usage tier for a year.

The Cloud Compute rollout came amid a broader set of cloud announcements from HP this week, which included new support for the kernel-based virtual machine, or KVM, hypervisor in its CloudSystem product; a new connector to allow CloudSystem users to burst into service provider data centers; and Continuous Delivery Automation software that automates the process of sending a workload from development to test, quality assurance and production.

Beth Pariseau is a senior news writer for and Write to her at [email protected]or follow @PariseauTT on Twitter.

* Updated on 12/07/12, after publication. 

Dig Deeper on Google and other public cloud providers