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Eucalyptus deal aims to raise HP's cloud cred

HP surprised many this week when it acquired open source private cloud vendor Eucalyptus. The deal could be a boon to HP's private and hybrid cloud strategies.

With its acquisition of Eucalyptus, HP hopes to give its private and hybrid cloud strategies a much needed boost and pick up some additional street cred in the open source community.

As part of the deal, Marten Mickos, former CEO of Eucalyptus and one of the most outspoken advocates for open source, joins HP as senior vice president and general manager to spearhead the company's cloud organization. Mickos will focus much of his time adding more technology muscle to HP's Helion cloud-based lineup. Martin Fink, who now heads up the HP Cloud division, retains his roles as CTO and director of HP Labs.

Opinions varied about whether the acquisition would improve HP's fortunes in the enterprise cloud market over the short and long term, or if the Eucalyptus product would survive the bureaucracy of a $120-billion company.

"It's too early to speculate on what the end result is going to be, but I think the important thing is this doesn't bring [HP] any earth-shattering technology," said Lydia Leong, an analyst with Gartner, Inc. in Stamford, Conn.

Eucalyptus is in direct competition with some of the Helion services, Leong pointed out, even though early indications are that Eucalyptus will service as a product. How deeply HP will remain committed to that product will be an interesting situation to watch, Leong said.

"This is not predominantly a technology acquisition," Leong said. "This is primarily an acquisition of know-how."

Other analysts believe the acquisition makes sense for HP given its large and very diverse user base.

"A global company like HP has wide variability in its customer base," said Dana Gardner, principal analyst with Inter-Arbor Solutions, Inc. in Gilford, N.H. "Some will want to do their own geographically based managed services provider, others hybrid or private clouds, and still others will want OpenStack or Cloud Foundry. It makes sense for [HP] to cover the entire waterfront."

It's too early to speculate on what the end result is going to be, but I think the important thing is this doesn't bring [HP] any earth-shattering technology.
Lydia Leonganalyst with Gartner

This deal could improve compatibility between Amazon Web Services (AWS) and OpenStack as an acknowledgement that customers want to use multiple cloud vendors and migrate workloads among them, according to Lauren Nelson, an analyst with Forrester Research, Inc. in Cambridge, Mass.

"Their thinking could be, Eucalyptus and AWS is the standard, whether we like it or not," Nelson said. "So instead, 'How do we make it easier to consume around that and how do we leverage those same templates and make it easier to not completely redo or rethink things?'"

OpenStack backers, however, generally believe the technology needs to stand on its own and not be part of the Amazon ecosystem. For Eucalyptus, it might not have had much choice other than being acquired by a major company like HP, Nelson said.

"The movement is fizzling," Nelson said. "They don't have the momentum, they've got a really good product but there's not much investment behind that, so there really wasn't much traction and the question became, where do we go next?'

It's unclear exactly how HP will use the Eucalyptus product, but some have speculated it would be clunky at best inside OpenStack and this move will eventually mean the end of Eucalyptus.

"All signs say it would be very doubtful that they would continue that Eucalyptus project," Nelson said. "They're probably going to kill it and refocus on HP's hybrid products."

Is OpenStack no longer the 'Soviet Union' of cloud?

The deal might also inspire some corporate users to finally move past the stage of just endorsing OpenStack and instead commit to implement the open source offering in production. Many enterprises so far are only in the evaluation stage with the technology, despite being available for four years, citing difficulties with integrating it with existing infrastructure, lack of trained staff, and high costs.

Ironically, Mickos has made it clear in the past he has major reservations about OpenStack. He once publicly commented that it was "the Soviet Union of the cloud" because it had so many supporters among vendors and corporate users but never seemed to establish any real commercial success.

In the recent past, Mickos has softened his position on OpenStack, although he says he will not hesitate when he sees something in the technology that must be fixed.

"Vendor momentum behind OpenStack is enormous but there are things not yet in shape," Mickos said. "When you complain people say, 'Don't complain, just fix it.' Well, I am helping with my two bare hands to build that barn. And because I have been an open critic I can come into with a sober view of it."

OpenStack needs further hardening and companies like HP and Red Hat must get production versions of their compatible products working well and out into the market, Mickos said.

"I have gone through this ordeal with Eucalyptus and we made those mistakes early on," Mickos said. "You could have said the same thing about us: Where are the customers, are the products hardened and did we apply the required focus? Now, we have real-world examples of what works and what doesn't."

Mickos raised eyebrows last month when he was listed as a keynote speaker at an upcoming OpenStack conference. While the knee-jerk reaction may be to focus on the open source friction, analysts say this is more about talent than tools. Eucalyptus brings a team of engineers that have spent the past several years focusing on hybrid.

"That team is hard to hire," Forrester's Nelson said. "Those are limited skill sets and those are pretty specific engineers that could be very useful for HP as they look forward to build out more hybrid technology."

Mickos rejected those assumptions and said to watch for Eucalyptus in 2015.

Trevor Jones is the news writer for SearchCloudComputing. You can reach him at

Ed Scannell is senior executive editor for TechTarget's Data Center and Virtualization media group. He can be reached at 

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