Hewlett Packard Enterprise may have abandoned the public cloud, but that isn't stopping it from trying to be an enterprise cloud provider of some variety.
HP Enterprise's latest strategy, which dovetails with earlier plans to focus on private and managed clouds, is to partner with Microsoft and become an Azure reseller. HP Enterprise still has a lot of customers, and this move takes advantage of them and the market share they represent.
As announced in the company's quarterly earning call, the plan is to have Microsoft and HPE be "preferred" customers of each other's products. HPE will likely sell server hardware to serve as on-premises nodes in the hybrid fabric that Microsoft has in mind for Azure.
Most of the competition comes from three other sources: Dell, Lenovo, and the horde of ODMs (white-box vendors) overtaking the server landscape. The good news for HPE is that it still owns a quarter of this market, the single largest slice among vendors. (It owns an even bigger portion -- 36 percent, by IDC's count -- of the costly high-performance cluster market.)
Dell is the likely model here, as the company has already teamed up with Microsoft to deliver integrated hardware called the Cloud Platform System that connects to Azure. Even before then, Microsoft had tried an approach involving an Azure-connected storage system, StorSimple, but it was overpriced and underwhelming.
HPE can come up with intriguing hardware designs (see: Moonshot), but the strategy here is about the customer experience with HPE and its iron. It's a smart move, as customers will respond better to two trusted names delivering their trademark items (HPE for hardware, Microsoft for software) instead of only one name attempting to leapfrog into new territory.
For Microsoft, pairing up with HPE is a unilateral win. Azure's hybrid design doesn't force users to make a total commitment -- workloads can be run locally, remotely, or in a mix of the two, and with as little or as much data and work held in the cloud as desired. And it's best for HPE to concentrate for now on a less adventurous strategy that has a reasonable chance of helping it stay in the game.