Derrick Harris’ wrap-up of Infrastructure activity over the past quarter appeared here on GigaOM Pro overnight, and from everything that’s happened in the past three months Derrick singles out the ongoing bubble of enthusiasm around Big Data and the reality check that struck Infrastructure as a Service (IaaS) as headline items. Before I started writing regularly for GigaOM Pro, I always used to tell people that the quarterly wrap-ups were worth the subscription on their own. This one’s another great testament to why I was able to say that. Make sure to give it some attention.
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
Salesforce passed $1 Billion in Cloud-derived revenues two years ago, almost entirely based on ‘subscription and support revenues’ from their Software as a Service (SaaS) CRM offering. At the other end of the stack, down in Infrastructure, Amazon is believed to be doing pretty well, but the company still refuses to break out results for their Cloud offerings.
Rackspace (by most measures number 2 in the Cloud Infrastructure game) yesterday reported results that show Cloud-based revenue of just over $100 Million for 2010. As Derrick Harris notes, Cloud revenues make up an increasing proportion of the hosting company’s profits. It’s not Salesforce though, and neither is Amazon. Margins remain far higher for those at the top of the stack, forcing infrastructure providers to continually balance low-margin commodity reach with adding differentiating features to move them up-stack toward the money and lasting customer relationships.
Derrick Harris, the previous incumbent hereabouts, is amongst those reporting today’s merger between NoSQL players Membase and CouchOne. The news is interesting in its own right, but more significant as an indicator of the consolidation to come as the ‘NoSQL’ market beds down. Tools here – and in the broader Big Data space – tend to be pretty raw, and highly optimised to tackle very narrow problem sets. Beyond the early adopters, customers are far more likely to seek reasonably rounded solutions that can address a range of their business requirements. Mergers, alliances, and maturing code are all part of meeting that demand.
If anything, the conversation at Structure last week wasn’t so much about what cloud computing is but, as Derrick Harris notes in his weekly update, more about its use cases and how to improve it. Celeste LeCompte also noticed how many are seeing the resulting cloud infrastructure and its resulting efficiencies make their mark on the world of green and IT.
Tomorrow is Structure 09, the GigaOM Network’s second annual infrastructure and cloud computing conference, and the GigaOM Pro team will be hanging out all day at the San Francisco Mission Bay Conference Center. We’re looking forward to the keynote addresses from Akamai CEO Paul Sagan and Marc Benioff, Salesforce.com’s founder, CEO and chairman — but we’re also looking forward to spending plenty of time with the rest of the attendees and speakers. The whole GigaOM Pro Infrastructure crew will be on hand to answer questions and talk shop.
Derrick Harris is traveling for the day, so I’m filling in for him. He pointed a few things before leaving (curating VMware and security news!) and also suggested that there may be news coming out of events today. Interop is keeping Vegas busy; the livestream is available here, and you can follow #interop on Twitter. Forrester IT Forum is also happening today. The livestream is up on Ustream, and follow #Fitf09 on Twitter.