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HP plots Amazon assault with bellicose Helion channel army

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HP is building a clone army to take on Amazon's mammoth cloud.

The enterprise IT company announced on Tuesday that it will make its OpenStack-based Helion cloud technology available to partners and resellers around the world to let them create their own services to compete with Amazon, via the newly-announced Helion Network.

It's a remarkable turn of events for a company that, like contemporary IBM, had previously prided itself on top-down tech. Until now, it had only offered the Helion tech as a public cloud.

HP has adopted the new strategy because, like many other companies, it is frantically searching for a business model that will quell the rise of Amazon, buying it time to develop a loyal customer base in the Wild West of cloud computing.

To make Helion a viable piece of technology, HP has said it will invest $1bn over two years into OpenStack to turn the open source project into an Amazon-thumping, Google-guzzling, Microsoft-throttling piece of cloud tech.

Now, with the Helion Network, HP wants to arm disgruntled companies around the world with the technology, as well.

The Helion Network is designed to gives channel companies and resellers a lifeline in an increasingly margin-starved world, and also to lets small hosters and telecommunications companies gin up their own clouds on a technology led by a sophisticated company.

"The channel are a critical component to the Helion Network and the service providers see that as well. It's a way to reach customers they can never reach before," HP's vp of cloud, Steven Dietch, told El Reg. "[Helion means] increased revenue because they'll have access to a much broader portfolio of cloud services. This is going to provide them the means to enhance their geographic reach."

Interested parties will be able to buy a license for HP Helion OpenStack for $1,400 per server per year, with multiyear and volume discounts starting at 50 nodes. Though HP will gladly sell them HP hardware and software as well, the only prerequisite for being in the network is supporting Helion infrastructure-as-a-service software.

"We are harnessing a global ecosystem. This is not some vendor or some startup – this is HP bringing its girth of global footprint," explained HP's vp of cloud Steven Dietch in a chat with El Reg. "Everyone has to believe this if they want to be part of the network – they want open, they want enterprise capabilities, and they want something that will not lock people in."

It's a nice idea, but many other companies have tried this approach and, arguably, failed. IBM, for instance, ran its SmartCloud tech in this way. The approach was not successful and SmartCloud's failure led Big Blue to buy SoftLayer for $2bn dollars.

VMware tried a similar strategy with the VMware Service Provider Program, but it also failed to work and the company had to reboot the scheme via the vCloud Hybrid Service program. European startup OnApp has gone the same route, as well, but to limited success.

This time is different, HP says. The reason why, Dietsch said, is because of the OpenStack technology on which Helion is based and the enthusiastic community that comes with it.

Some of that motivation will come from the dislike many companies feel for Amazon, which has created the modern cloud computing marketing without sharing much business with other infrastructure providers.

"We believe we have a path forward to provide a very strong growth trajectory to everybody that wants to join us," Dietch says.

That path will involve some leadership on the part of HP, Dietsch indicated, such as keeping providers on a relatively up-to-date Helion distribution. "One of the promises of the Helion Network is to harness the rapid innovation of the OpenStack ecosystem. We've had these conversations with many service providers," explained Dietch. "The OpenStack open source tempo is something they're going to have to address to thrive to the future marketplace."

But pricing will be up to HP's Helion members for now, he said. "We want to make sure there's a level of standardization on the technology and business model innovation," Dietch said. "When it comes time to actually price and differentiate, let the market reign and the partners bring the portfolio forward."

Perhaps there's hope for the channel in the cloud after all, eh? ®

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