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Beating the beasts

"Hewlett-Packard is committed to being a top service provider running a global cloud. We have partnered around world with existing service provides – telcos and others – and will leverage the local presence of service providers. The whole idea is think global but act local."

Coding for HP's cloud was a challenge, but the company has taken short-cuts on expansion by not rolling out its own, new data centres. Selling this thing against Amazon promises to be a tougher challenge. Amazon has proved especially good at competing on the fourth element mentioned in the tweet from last month: price.

The company provides compute using Windows and Linux. The latter has allowed Amazon to provide compute cycles at points of a penny less than using Windows, a fact that has dragged Microsoft into a price war.

Since launching Windows Azure, Microsoft has had to undercut its initially smallest compute offering of 1.75GB at $0.12 per hour and dive down to 768MB at $0.02 per hour. HP is starting out at $0.04 for 1GB of RAM and 30GB local storage.

Despite undercutting Amazon, Microsoft's cloud has failed to float and while it has named some flagship customers and made some vague claims of "high tens of thousands" of customers", we've been reliably told that some already very low revenue targets will be missed for this year. We can bet too, that at $0.02 Microsoft is heavily subsidising the price of Windows Azure.

Google is also adding pressure. The same day HP's cloud went live, Google Cloud SQL database service, unveiled in October, also went live and added a new twist to the pricing matrix: charging not per hour but by the day.

How does HP stand up to Amazon and apart from other cloud providers? Everybody is targeting the devs, be they at the enterprise or start up; these are the people who've helped establish Amazon – by floating early apps using its convenience and low barrier to entry – and who have since stayed with the bookseller. Throwing price against the leading commodity player won't help.

Instead, HP is gambling on services as value-adds that make devs' lives easier – something Amazon hasn't really excelled at. Beyond the obvious multi-language and framework support – PHP, Java and Node.JS – and database-as-a-service, we're promised analytics as a service, service level agreements, command-line programming, a "good" UI experience and management console, billing and customer support.

Not out!

"We want to reach developers and IT operations folks with a set of services and options to build workloads on clouds and manage and deploy and be secure," Singh said. "We will leverage a marketplace - an application catalogue for the marketplace – to monetise these services and offer partners a way to monetise their service."

Working out the kinds of services that add value, which people want and are willing to pay for on top of compute and storage, is the hard part and this will take time.

It's "early innings" for the boxmaker-vs-cloud-services competition but Singh believes HP has learned fast during his brief time there.

"The big focus is how to translate from building and shipping hardware to shipping services at a global scale," Singh said. "The maturity level has gone on an exponential scale – I'm confident it will continue on that path."

The PC maker of Palo Alto might be evolving its technical understanding of services and open source down a zen-like path, but it will be how HP responds to the brutal realities of doing business in a commoditised space, driven by market-leader Amazon, that will ultimately decide whether HP's journey is a success. ®

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