HP Buys Eucalyptus

By Joe Casad

PC vendor turned cloud provider says the OpenStack march is still on – but why not spice up the mix?

In a move that surprised many industry insiders, HP has purchased cloud tool vendor Eucalyptus. HP has been working hard on entering the market as a cloud provider through its HP Helion service, and the company is seen as a strong backer of OpenStack technology. That HP would spend a sum that is estimated at around US$100 million for an alternative cloud platform is a surprising development.
The press release announcing the transaction offers few clues for the strategy behind the purchase. Eucalyptus was an early leader in the cloud game before losing attention and market share to rival OpenStack. One reason for the purchase might be Eucalyptus’s close ties and ready interface with Amazon Web Services. Eucalyptus’s Amazon connections make it ideal for hybrid cloud scenarios, in which a private cloud connects with a public cloud system for peak load and failover services.
HP will be able to sell OpenStack for public cloud configurations and keep Eucalyptus around as an option for private and hybrid cloud scenarios. The deal also gives HP some leverage over the Eucalyptus/Amazon relationship, although it isn’t clear whether Amazon will continue to support close ties with Eucalyptus now that it is owned by a cloud competitor. In the long run, HP might intend to adapt Eucalyptus to provide the same level of affinity for the HP Helion cloud it now has for AWS.
This unexpected Eucalyptus purchase underscores an interesting point that could easily get lost in the rush to cloud: Unlike Rackspace, Red Hat, Amazon, Microsoft, and many other companies offering cloud services, HP is primarily a hardware vendor, and they get lots of money for selling the server systems that wind up in conventional server rooms. HP therefore stands to benefit from a local cloud or hybrid cloud scenario that keeps computing resources on site.

09/15/2014