HP announced that it would be offering cloud services to its customers almost five years ago. However, according to the New York Times, as of April 7th, the company is finally leaving the public could service out of nowhere.
Over the years, HP’s cloud plans have changed a number of times in the years it has been in operation. In its recent upgrade, HP hoped to put up a spirited fight against some of its competition that include Amazon, Google and Microsoft with the Helion Cloud enterprise. This is a blend of opensource OpenStack Cloud, the just acquired eucalyptus cloud and the server hardware from HP.
Bill Hilf who is HP’s senior Vice President for the company’s cloud service told ZDNet on September of 2014 that HP which had previously made cloud partnerships with a variety of other companies that included Cloudstack, VMware, Microsoft and OpenStack was finally deciding to pair with OpenStack for their Cloud services. The reason behind the move was that HP had become exhausted of being seen as a tag-along and instead wanted to venture into greatly growing the strategy of their cloud service.
Later on in 2015, Hilf in an interview with the New York Times said, “We thought people would rent or buy computing from us. It turns out that it makes no sense for us to go head – to –head.”
The painful revelation came in a span of six months after the company CEO Meg Whitman announced that the Silicon Valley giant which has in recent times become very fragile would divided into two. This would mean that the HP enterprise would focus more on public cloud power but that idea has now gone down the drain.
However, this does not mean that the cloud is not a business that HP would not like to be associated with anymore. It is looking to get into the integrated private clouds which is its Moonshot servers and Hyperscale Cloudline; together with a number of other hybrid and private cloud offerings by selling its Helion Rack. All HP is saying is that they will not be trying to fight it out with the big dogs like Amazon Web Services and the others.
The move came after a 2% decline in HP’s revenue in the 2014 fiscal earnings year-over-year as well as a 1% decline in earnings over the same period. The trend has continued to worsen with a 5% decline in non-GAAP earnings year-over year. Apparently, it was more costly to split the company than had been anticipated and the earnings were not as much as Wall Street had projected.
The light side of this is the fact that after the hasty decision, the company has become a fast moving company- one that does not find it hard to leave a market once the profits are not as expected.