Andreessen Horowitz announced today that Peter Levine is to join the firm as a venture partner. With executive experience at companies such as Veritas and XenSource, Levine brings enterprise IT knowledge to the well-known venture firm, allowing them to build upon earlier investments in enterprise-friendly cloud companies such as box.net. According to ZDNet, Levine will “help Andreessen Horowitz evaluate new deals in infrastructure, cloud computing, networking, virtualization, and storage,” which should keep him busy for a while. Andreessen Horowitz has made a number of interesting investments recently; it will be intriguing to see the direction in which Levine tries to take them.
Today is Red Nose Day here in the UK. Children go to school wearing red, cars, lorries, buildings and people sprout big red noses, and the BBC devotes hours of prime time television schedule to raising money for good causes in the UK and Africa. Millions of pounds are raised while the BBC programs are on-air, and the charity’s web site sees massive spikes in traffic; in 2009, the site recorded up to 116 transactions per second. Zeus Technologies is once again donating its software-based load balancing solution to the cause, with a view to keeping the site responsive even as television celebrities exhort millions of viewers to go online and donate. Zeus is certainly not alone, as technology companies have a good record when it comes to supporting worthy causes such as this. But I can’t help wondering how you get a red nose onto a software-based load balancer?
Hewlett Packard‘s new CEO, Léo Apotheker, presented a sweeping vision this week for his company’s plans, one that encompasses cloud, connectivity, hardware, software and more. During the keynote, Apotheker outlined a vision for his company that encompasses “the home, the workplace and on the road.” Connectivity is key, with “seamless, secure and context-aware” access to cloud-based content and services via a range of devices. Much of what he said makes sense, but how will HP differentiate itself in the already crowded enterprise, SME and consumer markets?
Having watched Apotheker’s presentation and read much of the coverage, it’s not entirely clear where that real and lasting differentiation HP needs lies.
At one level, of course, this is simply the Internet he’s talking about. We already access a wealth of public and private content using phones, tablets, laptops, desktops and televisions. We use websites that deliver one version of a page to an iPhone and another to a web browser running on a desktop, smoothly and automatically. We already have email and calendars pushed over the Internet to smartphones, interacting with rich desktop applications or stored securely on servers for access via any web browser.
That aspect of Apotheker’s vision is an attainable reality today for many, from those using Google Apps out in the cloud to those running Microsoft Exchange on a server inside an enterprise data center. HP plays many valuable parts here: It provides the servers, storage and networking infrastructure on which that enterprise Exchange server depends; it sells many of the laptops and desktops on which content from both Google Apps and Microsoft Exchange is accessed; and it even, with webOS devices, is making new inroads into the smartphone market, which the company at one point appeared to have left behind.
As EMC’s Chuck Hollis comments, the new HP that Apotheker describes in the keynote no longer appears content to provide pieces of the whole — that is, servers, storage arrays or laptops that in most cases could easily be swapped out and replaced by very similar products from competitors. While explicitly — and repeatedly — recognizing the important role played by HP’s partners, the new HP appears determined to own whole market segments, and to deliver end-to-end services capable of addressing consumers, SMEs and large enterprise customers. If achieved, this domination makes HP’s position in a market far more defensible, and carries far higher margins. But it’s a risky strategy, too, because it has a tendency to be an all-or-nothing one: Either you completely dominate a market segment, or you have virtually no presence in it at all. Will WebOS, for example, ever really be more than a worthy competitor in a market dominated by Apple, RIM and Android?
Apotheker’s presentation wasn’t long or focused enough to provide many details, and there was no real indication that HP intends to leverage its existing market position in order to do anything new or particularly different. HP is the number one seller of desktops and notebooks. That’s a lot of new computers arriving at desks every day. Rather than simply providing a me-too cloud infrastructure that resembles Amazon or Rackspace or anyone else, why doesn’t HP aggressively market a cloud-based backup and storage solution to consumers and SMEs? Every new machine could ship with a free account for the HP cloud, a few GB of space and a wizard that pops up and simply asks when they’d like the backup to begin. And every new owner might then become an advocate for an HP cloud that fits Apotheker’s vision.
Instead of using market position to copy what others are already doing perfectly well, an HP with a vision of where it’s going should be using its market position to innovate, and to do what others cannot.
Question of the week
Startups such as SeaMicro have been attracting a lot of the low-power chip attention lately. Despite making the chips that SeaMicro use, chip behemoth Intel has been a lot less visible. That changed yesterday, as the company ramped up its corporate messaging around what they are calling a new category of “micro server,” and roped in Facebook’s Gio Coglitore to help tell the story. Power efficiency and space utilization remain of concern in the data center, and it is these areas that smaller and more efficient servers address. However, the chips’ reduced computing capabilities do not always fit well within existing software environments, and there have been suggestions that quite dramatic shifts in practise are required before the real benefits are realized. For now, Intel is being conservative; with the Wall Street Journal quoting Intel’s General Manager for Data Center Group Marketing as saying “We see the opportunity for micro servers approaching 10% of the overall server market.”