HP To Invest over $1Bn In Open-source Cloud

by CXOtoday News Desk    May 07, 2014

open cloud

Technology major Hewlett-Packard (HP) plans to invest more than $1 billion over the next two years to develop and offer cloud-computing products and services. Toward this end, the company has launched a HP Helion portfolio that it said will enable organizations to build, manage and consume workloads in hybrid IT environments.

The company will make its OpenStack-based public cloud services available in 20 data centers over the next 18 months, and will hire more developers and consultants to design, build and run cloud systems, it said in a statement. OpenStack, a cloud computing project that HP co-founded, provides a free and open-source cloud computing platform for public and private cloud services.

The investment would account for a substantial portion of HP’s shrinking research-and-development budget, which fell 8% last fiscal year to $3.1 billion, reports WSJ blog which also remarked that the commitment pales in comparison with cloud investments from bigger competitors such as Google, Amazon and Microsoft that are spending $1 billion to $2 billion a quarter to build data centers and acquire the necessary real estate, on top of billions more in R&D each year.

Nearly all the players are aggressively pushing them further to the cloud. Amazon.com and Google recently slashed prices of most of their cloud computing services as other companies join the fray. last month, Cisco Systems announced its plans to spend $1 billion on cloud computing services, over the next two years, while Microsoft said it will increase its cloud storage offering for business users 40-fold.

While analysts wonder, whether HP will survive the growing competition in the cloud computing space, some believe HP’s effort is somewhat unique in that it represents a risky bet on the free open-source technology known as OpenStack, a kind of operating system for computer rooms that is gaining momentum but is still young and needs more development.