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HP Dives Head First into Cloud Market with $1 Billion OpenStack Initiative

By Laura Stotler
TMCnet Contributing Editor

In a strategic move that pits it directly against IBM (News - Alert) and other public cloud players, Hewlett-Packard has announced they will spend $1 billion on cloud computing products and services built on OpenStack over the next two years. Solutions will be available under the HP Helion brand and HP will be offering its own free version of the open source OpenStack cloud software.

IBM has built its entire cloud strategy around OpenStack as well, making the switch a little over a year ago and rapidly becoming a contender in the IaaS arena. Interestingly, Dell (News - Alert) just announced yesterday that the company is “reaffirming” its commitment to open standards for building public, private and hybrid clouds. That includes a longstanding partnership with Red Hat (News - Alert) producing OpenStack-based private cloud solutions.

But while HP and Dell have traditionally been competitors on the hardware front, the companies have very different strategies when it comes to cloud computing. Dell has adopted a cloud-agnostic approach that enables the company’s platforms and environments to be used by the big public cloud players, namely AWS, Google (News - Alert) and Microsoft. HP’s approach, however, will be centered around building out the company’s own public cloud through its existing data centers in an attempt to take on the big IaaS players directly. The company will also make its offerings commercially available for private cloud development. 

“This changes how we think about who we are competing with,” said Bill Hilf, vice president of cloud product and service management at HP. “You don’t sell a box against AWS. You sell an outcome. I don’t think about Dell at all as a competitor.” Hilf knows a thing or two about cloud computing, having previously worked for Microsoft (News - Alert) Azure cloud before making the move to HP last year.

HP’s new Helion brand will be home to the company’s existing cloud offerings, including workload management and software development apps. The company’s public cloud is already available in two of HP’s 80 data centers and will be expanded to 20 of them within the next year, according to Hilf.

Funding for the new cloud initiative is being gleaned from existing capital, and HP expects to have a commercial version of Helion OpenStack on the market by June, geared toward service providers, large enterprises and others who wish to build out their own private or hybrid clouds using an open source model.