Facing facts, HP had to abandon the public cloud

Big enterprise software vendors will have a tougher time profiting from data centers, but shifting to the public cloud is even more fraught with danger

Facing facts, HP had to abandon the public cloud

Hewlett-Packard is pulling out of the public cloud business, it revealed this week. The HP Helion Public Cloud goes dark on Jan. 31, 2016.

Although this is big news at HP, I’m not sure the cloud computing world is surprised. HP’s public cloud has long struggled for adoption, eclipsed by Amazon Web Services and surpassed by Google, Microsoft, and IBM. As I wrote in 2011, HP's public cloud offered nothing distinctive or compelling -- and it hasn't changed since 2011.

To HP’s credit, it recognizes the reality and is cutting not only its losses, but preventing more customers from wasting resources getting onto Hellion, then having to leave later.

Instead of continuing to invest in an unsuccessful public cloud, HP is focusing on private and hybrid cloud computing. For large enterprise hardware and software providers like HP, that's a natural evolution. By sticking to the data center history with modern tech twists, HP can play to its strengths in technology, marketing, sales -- and its internal culture. HP isn't a cloud company, and it struggled to behave like one.

That said, I’m not sure that private clouds are viable over the long term, as public clouds get better, cheaper, and more secure. It will be hard to argue for private and hybrid clouds when they cost four times as much but deliver much less.

For some years at least, private and hybrid clouds will be areas in which enterprise IT invests, so it makes sense that HP takes advantage of it for as long as possible.

HP is not alone facing this sobering trend. IBM, Oracle, and other large providers face the same challenge of staying fat and happy as more enterprises move to the public cloud. The growth of the cloud means the death of a thousand cuts for large hardware and software companies.

Copyright © 2015 IDG Communications, Inc.