Why HP's split could work wonders for its cloud campaign

HP’s recently announced breakup might not make the company a leader of the public-cloud market overnight. But a few HP watchers harbor cautious optimism about what could come of the move.

If these people are right, the new Hewlett-Packard Enterprise, newly separated from HP’s printing and personal-computing units, could more effectively sell data center hardware, cloud software like its OpenStack distribution, and, yes, compute and storage resources in its public cloud.

The new company has a chance to get smarter about its operations. It could reduce the number of departments that essentially provide the same service — selling cloud — and along the way stop confusing potential customers by having multiple HP salespeople from different divisions compete with each other for the same business.

“I think that’s the opportunity and the challenge,” a former HP cloud executive who declined to be named told VentureBeat. “You look at how you organize the new companies, and based on your priorities and what your customers want, you really implement the innovation and nimbleness that you know is needed, and make all those things work better together.”

Meanwhile, the executive said, Hewlett-Packard Enterprise could finally shake loose the bad juju hanging around after the Autonomy deal. Plus, it could more aggressively acquire companies. That’s particularly true in the OpenStack world, where it could turn into a top arms dealer.

Such thinking jibes with a line in HP’s statement about the bifurcation: “The separation will provide additional resources, and a reduction of debt at the operating company level, to support investments across key areas of the portfolio.”

And that shift is crucial right here, right now, as HP gets pummeled in the commoditizing cloud infrastructure market. Amazon keeps running away with it, while Google and Microsoft make fast moves to keep up.

In OpenStack, there might still be time for HP to make more progress. Cisco, Dell, Red Hat, IBM, VMware have all conveyed in their own ways that they want to support OpenStack-based workloads. Even four years after OpenStack came out, though, adoption has not yet hit a fever pitch. So it’s not too late for HP to take quick steps and achieve greater strength relative to those other legacy technology vendors.

“I think the companies most at risk of a more competitive HP are IBM and Cisco, who have been enterprise-focused forever,” technology analyst Patrick Moorhead of Moor Insights & Strategy told VentureBeat in an email.

HP has emphasized this week that the new Hewlett-Packard Enterprise will inherently be smaller and therefore more nimble. One specific implication: Employees could communicate more efficiently with their colleagues in other departments.

“At a macro level I think the move is good news for HP’s overall cloud efforts,” Blake Yeager, manager of the TechStars cloud program and a former director of product management at HP Cloud Services, told VentureBeat in an email. “Hopefully it will ensure tighter collaboration between the enterprise servers, storage, and networking group and the group building the HP Helion portfolio. To date this collaboration has been lacking, preventing HP from effectively leveraging advances in its underlying hardware portfolio in its cloud services offerings.”

HP was not able to make a spokesperson available for comment for this story.