Today HP officially opened its own cloud. HP is very late to the cloud game, years behind the likes of Amazon, Rackspace, IBM, Verizon, AT&T and others.So how is HP going to make people want to use its cloud above all others? We caught up with Biri Singh, SVP and GM for HP Cloud Services and asked.
Here’s the upshot:
- HP is going to try and become a premium brand, not competing with AWS on price and calling itself a business-class alternative.
- HP believes that startups — particularly those that sell services to enterprises — will want to move off Amazon as they grow but won’t want to build their own data centres. Singh name dropped Zynga and Workday as two examples.
- HP is banking on a method of building its cloud called OpenStack. As more OpenStack clouds come online, businesses can easily move their applications between these cloud providers so they won’t be stuck with HP if they want to move. So HP will be calling itself more “open” than AWS. HP isn’t the only cloud claiming to be open: Citrix and VMware are building a network of clouds that do the same.
- Singh admits HP is late to the public cloud game. But he says that HP has a lot of experience in helping enterprises use the same technologies that public clouds use (called private clouds). He also says that HP will help companies run both private and public clouds in a so-called “hybrid” model.
Cloud is a very important area for HP. Companies want to buy less servers and networking equipment and rent what they need from the cloud. Even though most startups today are already using the cloud (and Amazon’s cloud at that), most big companies are only getting started. 80% of big companies have less than half of their applications on the cloud, according to a survey released this week by Cisco. [PDF]
Here is an edited transcript of the conversation.
Why are you calling your cloud’s next step a “public beta”?
Singh: On May 10 we go to public beta. We’re still in beta but we’re going to be charging for the service. We’re going to keep the service “in beta” until we see how it scales. Although HP runs a lot of services at scale, running a distributed compute and storage effort is non-trivial and we just want to be smart about it.
When will this service not be a “beta” service anymore?
Singh: We’ll go into general availability when we’re ready.
HP’s pretty far behind when it comes to all things cloud. What’s your plans to catch up and compete?
Singh: HP has actually been in the cloud business for several years. We sell massive amounts of gear to hyper-scale and Web 2.0 companies. We have been in the private cloud business for about three years selling a private cloud called CloudSystem, which is essentially selling enterprises a ‘cloud in a box’ if you will. That’s billions of dollars of business for us.
As to your point about us being ‘late’ yeah, we’re getting to public cloud today and a few players like Rackspace and Amazon have been in this space for roughly 5-6 years. I have tremendous respect for them and they have pioneered this space which is fantastic, but being late is also relative. You have to look at the rest of the market and collectively Amazon’s revenue and Rackspace’s revenue is still an interesting indicator of where the maturity of the space is.
And I would argue that standing up virtual machines (VM’s) and storage is kind of done. It was so sort of 2010. The world is actually looking for a bunch of different cloud services on top of basic infrastructure. That’s where our attention and focus has been. Things like database as a service, analytics as a service, and an [application] marketplace.
All the startups I talk to these days are using Amazon and planning on growing there for years. So who will your customers be?
Singh: Remember the Silicon Valley phenomena in 2008 when the markets fell apart and the partners at Sequoia Capital said they’ll never fund a startup that’s looking for CAPEX? They said go to Amazon and build your stuff there. Hooray for Amazon but if you talk to the startups that have matured since 2008, especially the ones trying to sell to enterprise or service providers on a global footprint, a lot of them are actually not closing business because their enterprise customers turn around and tell them, “When are you going to host your services on something other than AWS because I don’t trust you just running singularly on AWS?”
That’s not a knock on AWS. But serious customers are like, ‘Look, if I’m going to bet on you as a startup I better know that you’re going to be around. I better know that you’re running my applications on secure clouds.’ You can look at Zynga as a fantastic example of figuring out it can control its own destiny. So Zynga came to us. They said ‘We’re not going to bet our eggs and our chickens on AWS. We’re going to build our own cloud but we’re also going to ask people like HP and others that the minute you can flex large nodes at scale we’ll actually use your service.’
We’ve had Workday’s Aneel Bhusri and Dave Duffield (their company is no longer a startup), come to us and say listen, ‘I have no interest in hosting my own. If you guys can provide for me an elastic cloud with multi-tenancy and you can give me security and an SLA, and the HP brand on a global basis, I’ll run my workloads on your cloud. I’m not going to do it on AWS.’
A lot of startups are going to continue with AWS and other options. But, as you’ll see when we come out of public beta, we’re hosting a bunch of ‘startups’ ourselves.
Having said that, I sort of agree with your point of view. We’re not necessarily the first place a startup is going to look for in getting going. But I can assure you we’ve also got the type global footprint and an SLA and a business-grade point of view that understands the enterprise. That’s what we’re betting on.
Are you guys going to be competing on cost or are you going to be a premium cloud?
Singh: We’re not going to compete on price. We’re happy to have AWS lead the way there if that’s what they want to do.
You use OpenStack. Will companies be able to move from HP to other clouds?
The HP architecture is exactly against lock in. If you look at our partners and you look at this architecture in OpenStack and our API’s and how we’re approaching the market, we’re all about everything against lock-in right? There are other vendors and you basically have to commit to them and then ultimately, it becomes very expensive. So the HP cloud is absolutely the reverse.
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