Hewlett-Packard Co. wants to become a major player in software and cloud. Its partners want to know how they’ll make money off these endeavors. And they really want to know if HP’s cloud-and-software plans will pit it—and them—against Microsoft.
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HP's new CEO Leo Apotheker unveiled his cloud computing vision at last week’s HP Summit and said the company is building cloud infrastructure and a cloud application development environment. An estimated 2,000 partners will attend next week’s HP Americas Partner Conference 2011 in Las Vegas, hoping to hear more specific details about timetables, deliverables and where they will fit in this new world.
“We need to hear the tactical stuff,” said an HP partner on the East Coast. “What is our role? No one’s making a business off the cloud right now, at least none of us, so my question is, what’s happening now?”
The long and winding software road
HP is first and foremost a hardware company. Staying competitive in that cutthroat market requires full attention, and several partners said HP, to put it nicely, is distracted.
“HP is a $120-something-billion company, and not much of that comes from software,” said the East Coast partner. “The hardware business, on the other hand, is huge and very competitive. You have to bring your game to it every day, and I do not see that happening now at HP.”
Several HP VARs characterized HP as a niche software player, but others said it has a solid toehold with its BTO Software systems management franchise.
“They do have a great portfolio but have not done a good job in selling it or positioning it,” said Romi Randhawa, CEO of HPM Networks, an HP partner in Pleasanton, Calif. “I hope that changes.”
HP vs. Microsoft in the cloud
HP partners also want to hear how the vendor’s cloud and software plans diverge from or dovetail with similar plans from Microsoft. Most HP partners are also Microsoft partners, and they fear more schisms are forming between those two giant vendors, which could put them on shaky ground.
Microsoft and HP, long joined at the hip as a kind of software/hardware duopoly, have seen their interests diverge in the past year or so. They are already at odds on the smartphone operating system front, as HP pushes WebOS hard while Microsoft beats the drum for Windows 7 Phone. And that fracas might just be the tip of the iceberg.
Apotheker’s broad-brush description of an HP-built cloud infrastructure and application development platform sounds much like Microsoft’s Windows Azure. Paul Shoberg, director of sales at Works Computing Inc., a Bloomington, Minn., HP enterprise partner, said HP needs to implement a competitive cloud strategy that differentiates itself from the others.
It is possible that HP will end up using and/or reselling Azure services. (Last year, HP -- along with Dell and Fujitsu -- said it would build Azure-based appliances, although none of those efforts have come to fruition.) But it sure sounds like HP, under Apotheker, will forge its own path. Despite the inevitable happy talk about co-opetition, that could make for more rough times between HP and Microsoft alliance.
“I don’t know why they would pick a fight with Microsoft,” said a Boston-area HP VAR. “It doesn’t’ make any sense, and I can already see we’ll get pulled into that.”
Another battle of the IT vendor titans does not excite the HP VARs who are already battered and bruised from the HP vs. Cisco Systems data center hardware feud. Many HP partners also sell Cisco networking into joint accounts, and HP is trying to take more of that business for itself.
HP VARs said they need reassurance and details about the company’s cloud and software strategy, not more bashing of other IT vendors. The East Coast VAR said industry execs tend to shut themselves off in conference rooms and convince themselves that their company can do a better job on a given technology than the incumbent power.
“They live in a reality-free zone,” he said. “We just need stuff to sell.”
Mobility craze upsets incumbents
HP and Microsoft are both struggling in the face of the great mobile upheaval. HP partners said business interest in new form-factor tablets is sky high, which means there’s an opportunity for nontraditional players -- Android as opposed to Windows, for example -- to take off.
Several HP VARs said they expect a new class of device to emerge: tablets that roving professionals can carry around but that also plug into a desktop docking station.
“Right now, everyone has Microsoft systems, but that will change, and mobility will drive that change,” said the East Coast VAR.
Many eyes at next week’s partner show will focus on Todd Bradley, the former Palm executive who’s now executive vice president of HP’s personal systems group -- and HP’s most visible proponent of WebOS. Despite customer interest in HP tablets, WebOS remains a tough sell, partners said.
HP’s decision to cast its weight behind WebOS may be one of the company’s defining moments, and it represents a huge gamble. WebOS, which comes out of HP’s purchase of Palm Computing, is way behind Google’s Android, Apple’s iOS and even Microsoft’s Windows Phone 7, partners say. And many doubt that HP can make up that ground.