By revenue, they're the largest IT company in the world. Although they may not have the panache of a Google or Apple, like IBM, they've got a boatload of potential capabilities.
And, after more than 30 years in the IT industry, you learn to treat very large elephants with respect.
So, it was with more than passing interest that I pawed through the various commentary from Leo Apotheker on how HP intends to play their "cloud hand".
The good news: he was very clear. The problem: I think in some respects HP might have made the wrong strategic choice.
What's Going On Here?
Many of us believe that cloud is the Mother Of All Disruptors in the IT industry.
Business leader and IT leaders alike are beginning to realize that cloud can potentially redefine how IT delivers services, and essentially repositions what an IT organization is all about.
Vendors are realizing that -- once again -- power positions are up-for-grabs in the IT industry. It ain't business-as-usual any more, or -- more properly -- won't be for very long.
A Key Strategic Choice
One of the core strategic choices that EMC wrestled with early on was positioning. Do we want to sell cloud services (e.g. be a cloud vendor) or sell enabling technologies and services to those that do?
After going back-and-forth, and realizing we couldn't have it both ways, we made a full-on bet on the latter approach: deciding our efforts on cloud enablement vs. providing cloud services directly to IT organizations. Incidentally, Cisco (and, of course VMware) are largely in the same philisophical boat as EMC, and for very similar reasons.
HP's strategy will be to build very large and very functional clouds, owned and operated by HP. They stated that their target competitors will be Amazon and Google.
At one level, this is all very reasonable. Amazon and Google (and, to a certain extent Apple, Oracle and Microsoft) are directly challenging HP's core markets in infrastructure as well as desktop.
One could make a case that the battle should be fought there, and nowhere else. And I'm sure that there will be much speculation around HP's prospects in this regard.
But, in making this key strategic choice, what are the broader implications?
What About Service Providers?
EMC's belief is that there will be many, many public cloud service providers for IT consumers to choose from. These IT-as-a-service SP market is already quite considerable (although relatively poorly charted by the traditional pundits) and appears to be growing at breakneck velocity.
And, as these next-gen SPs go looking around for IT vendor partners, the last thing they want to do is bet their future with someone who has a clear and public strategy to compete with them head-to-head.
It's not a technology discussion, it's a business discussion.
There's Only So Much Money Available
Deciding to invest in what is (presumably) a global network of scaled-out data centers is going to take a lot of cash -- both upfront, and on a continuing basis.
Every dollar that is spent on this new venture is a dollar that won't be spent on improving HP's technology portfolio, or acquiring new companies, or investing in new solutions for customers. Owning and operating data center infrastructure has never been the most margin-rich business, either.
And, at a time when technology paradigms are moving faster than ever, that's got to be a hard choice for HP to make.
What About The Enterprise?
No surprise, EMC (along VMware and Cisco) are heavily invested in transforming larger IT organizations into a private cloud model. It's not only about enabling technology, it's about process and organizational change as well.
Between our individual companies, and our collaborative joint venture (VCE), we're collectively investing staggering sums to bring about this transformation for our customers: essentially helping them to become internal IT service providers.
No mention in any of the HP materials around the importance of helping to evolve their customers forward along this vector. Another really hard choice for HP to make.
Connecting The Dots
It's no secret, individually and collectively, V, C and E are pursuing the same cloud-enablement strategy.
Move your customers to a fully virtualized private cloud model.
Invest in creating an ecosystem of compatible service providers.
Connect your cloud-enabled customers with your cloud-enabled service providers. Choices and options abound for everyone.
Compare that with HP's intent to build and sell cloud services directly to IT organizations -- essentially bypassing service providers, resellers, system integrators -- the whole value-added ecosystem that's so essential in today's enterprise IT world.
Another really hard choice for HP to make.
Impact For Customers?
If we put the lens on HP's customers and partners, and try and assess the impact, it's early days. My guess is that HP will start following behind IBM's message, which is essentially "this IT stuff is way to hard, let us do it all for you".
For some IT organizations I meet, that's certainly a valid proposition. But for most, they'd prefer to do some of the important bits themselves.
We'll see ...