HP’s news that it will abandon its public cloud business puts a spotlight on the global cloud computing arena — who’s doing well and who isn’t. After struggling over the past few years to keep up with the needs for enterprise technology — something it once was king of — as the market turned toward cloud, mobile, and away from hardware, HP has perhaps realized its inability to compete with the likes of Amazon.
Enterprises have been gravitating towards private, hybrid, and public cloud infrastructure services for years now, but HP’s throwing-in-of-the-towel on public cloud shows how business infrastructure needs have shifted while it wasn’t looking. (Indeed, HP CEO Meg Whitman announced earlier this year that the company will split into an enterprise hardware and services business and a PC and printer business in order to react more swiftly to the “tectonic shifts” in market demands.)
HP’s Bill Hilf, SVP and GM of HP Cloud, wrote in a blog post on Wednesday:
The market for hybrid infrastructure is evolving quickly. Today, our customers are consistently telling us that in order to meet their full spectrum of needs, they want a hybrid combination of efficiently managed traditional IT and private cloud, as well as access to SaaS applications and public cloud capabilities for certain workloads. In addition, they are pushing for delivery of these solutions faster than ever before.
He details how HP will continue to invest in its HP Helion OpenStack platform, but move away from HP Helion public cloud. Without saying it out loud, HP will leave public cloud work to those who are stealing the show — namely Amazon.
Amazon Web Services is a mammoth cloud structure that is on track to rake in over $7 billion this year. Business Insider reports that AWS owns 40% of the server market for small and medium sized app companies while Salesforce and Microsoft each took only 5% and 3% of the market. While Google and Microsoft are behind Amazon in terms of revenue right now, their cloud businesses have continued to grow exponentially. (Even if overall revenue is projected to decline year-over-year, as in Microsoft’s case.) IBM has worked to become a household name in cloud too, reportedly making $4.5 billion in revenue from cloud delivered as a service – outside its private cloud services — and that’s a 45% increase in revenue from cloud on year ago.
Part of the problem for companies like HP is that cloud and mobile tech moved so quickly over the past decade that companies like it, Intel, Dell, and others were left out to dry as Amazon and Google led the charge. Even Microsoft — which has famously struggled to hold onto its consumer electronics and PC businesses as its Surface tablet’s sales failed to meet expectations — has maintained a healthy cloud business dubbed Azure. If anything, the struggle of those legacy tech companies serves as a lesson for others that are thinking ahead to what the landscape of enterprise IT will look like.