HP Enterprise’s Newest Cloud Tactic? Work with Microsoft to Sell Customers on Azure

A. DeCarlo

A. DeCarlo

Summary Bullets:

  • Close on the heels of its decision to shutter its Helion public cloud, HP Enterprise is going the partner route to the hybrid cloud with a new alliance with Microsoft Azure
  • HP Enterprise will now sell customers on Microsoft Azure services while Microsoft will send customers seeking out consulting and private cloud services to HP Enterprise

HP Enterprise CEO Meg Whitman slipped a surprise into the Q4 2015 earnings call, the last quarter in which HP reported as a single company. The company is teaming with long-time ally Microsoft in the cloud. HP Enterprise, which announced last month that it is scrapping its own Helion public cloud services, will now be a preferred Microsoft Azure partner. The company will now sell Microsoft Azure public cloud services while the latter will point clients in need of public cloud and consulting services to HP.

Whitman was light on specifics, promising more details at the HP Discover customer event in London next week. What is clear is that this is a potentially mutually beneficial relationship. HP, which was no match in the public cloud for top tier Infrastructure as a Service (IaaS) providers Amazon Web Services (AWS), Microsoft Azure or IBM, opted out of the public cloud entirely. Instead, the company chose to take a different tactic – aligning itself with Microsoft Azure, which claims a 100 percent increase in year over year cloud revenues this year. With no specifics given, it is impossible to assess the revenue potential from the relationship, however, there are many possible benefits for both companies and their customers. Not only is HP Enterprise likely to sell more hardware in volume to Microsoft, but in its role as a distribution channel for the company it will certainly get a cut of the sales. Likewise, Microsoft gains an important resource in a company with a vast sales force and extensive network of channel partners. HP Enterprise also brings consulting resources that Microsoft doesn’t have that can help close the deal. And, of course, HP Enterprise will benefit from the referrals to its own services, both consultative and, in some cases, private cloud.

At least on paper, this looks like a win-win, but we will wait for more detail. What do you think of the deal? Is this a good step forward in HP’s quest for success in hybrid cloud, or are there too many unknowns still?

About Amy Larsen DeCarlo
As Principal Analyst for Security and Data Center Services at Current Analysis, Amy assesses the managed IT services sector, with an emphasis on security and data center solutions delivered through the cloud including on demand application and managed storage offerings.

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