HP announced on Tuesday that it will invest $1 billion in cloud computing over the next two years. This investment will support new open source cloud platforms and products.
Their new cloud portfolio, HP Helion, combines several existing cloud services with new OpenStack products. HP was a founding platinum member of the OpenStack Foundation and feels that after 3 years of running OpenStack for enterprise environments it is uniquely qualified to offer superior business cloud solutions including hybrid, public, private and managed clouds.
Developing new cloud services and managed solutions are a strong trend in the industry. Many companies are moving towards this type of model over investment in infrastructure.
The $1 billion dollar investment will be spent in cloud-related initiatives to support the growth of UP Helion. It currently has over 80 data centers in 27 countries and a partner network of 110 service providers. Several entities have made similar announcements about substantial cloud investments in the last few months including Cisco, the Chinese governmentand SAP.
According to the Wall Street Journal this billion dollar investment is a huge portion of HP’s research and development budget which is down 8 percent since last fiscal year. This is in contrast to companies such as Google, Microsoft and Amazon, which are spending that amount or more each quarter just for data centers and billions more each year on R&D.
HP executive vice president and chief technology office Martin Fink said, “Customer challenges today extend beyond cloud. They include how to manage, control and scale applications in a hybrid environment that spans multiple technology approaches.”
HP realizes the need to try to compete in cloud, but may not have the resources or personnel to pull it off. WSJ reports, “In her effort to revive HP’s fortunes after a period of turmoil, Chief Executive Meg Whitman has stabilized the company over the past two-plus years but has yet to bring back sales growth and a reputation for innovation.”
It’s possible it’s new line of Helion products could help bring back that reputation although possibly risky since the services are based on free open source technology, OpenStack, which is young and less developed compared to cloud solutions offered by the big three Microsoft, Amazon or Google. However at least one other company is also banking on OpenStack for it’s cloud development. Ericcson is using it for virtualizing its network infrastructure in what is thought to be one of the largest OpenStack licensing deals yet.
New products include HP Helion OpenStack Community edition. It’s available for free and can be used to test basic workloads. There is also a development platform, an indemnification program, and a team of Helion professionals that will assist customers in planning and implementing cloud services.