HP Pumps Up Private Cloud Message, But Will Partners Follow?

For more than a year, Hewlett Packard has been researching ways to guide its channel partners into the Wild West frontier known as cloud computing. It's an ongoing journey, and partners still have plenty of uncertainty about where it will lead, but HP says it's making real progress in getting its channel ready for the rigors of cloud computing.

HP in late January launched a private cloud infrastructure-as-a-service that's delivered from its data centers. But more strategic from HP's perspective is its new Cloud Enablement Program, which gives partners financial incentives to build their own cloud service delivery platforms using HP's Converged Infrastructure portfolio.

For partners that are new to the cloud, the Cloud Enablement Program helps with planning, identifying business objectives, calculating ROI, and other challenging aspects of cloud-magnitude projects, according to Frank Rauch, vice president, channel sales, for HP's Enterprise Storage Server Networking (ESSN) group.

"Our strategy is to give partners a path to be able to sell the private cloud and demonstrate the private cloud," Rauch said in an interview. "We're making significant contributions in MDF to build out partner projects, and helping partners that are willing to co-invest and build out their own cloud infrastructure."

Capital expenditure is usually the biggest bugbear for cloud-curious solution providers: Most can see the glittering jewel of recurring cloud revenue but not all can afford to pony up the bucks for the infrastructure they need to become cloud service providers.

SHI, a Piscataway N.J.-based solution provider is one of the few that has made the jump, but the company generated $3 billion in revenue last year and plans to open a $20 million cloud services data center in Somerset, N.J. next July. It's a gamble that's well worth making in light of the returns that are waiting down the road, said Henry Fastert, chief technologist and managing partner for SHI.

"There aren't that many cloud service providers, but there will be lots of companies looking to deploy private cloud," Fastert said. "HP is not known as a service provider today, but the private cloud is an enormous opportunity."

HP's remedy to for channel capex challenges is Cloud Centers of Excellence, a program that includes training and financial support for partners to build their own on-site cloud demonstration centers. What's important about this initiative is that it's available to partners of all sizes, Rauch said.

"Not all of these partners are large partners," he said, adding that HP is also using partner-to-partner networking to link cloud beginner partners to others that have the capital and expertise to carry out cloud projects.

HP is also holding a series of one-and two-day Cloud Discovery workshops in which HP professionals teach partners about cloud business models, security implications and services delivery best practices. "We want to help our partners to become as skilled as our own cloud people," Rauch said.

Next: More Encouraging Cloud News

HP earmarked the cloud as a major infrastructure opportunity early on but has been less enthusiastic about using cloud in its own operations. Former HP CEO Mark Hurd was known for his wariness about the security risks in cloud computing and once declared that he "wouldn't put anything material in nature outside the firewall."

HP was late to the cloud but its latest moves in private cloud are encouraging because they tackle key pain points for the channel, said Romi Randhawa, president and CEO of Fremont, Calif.-based HPM Networks.

"Partners are struggling with how to wrap services around the cloud, and how to help customers to build private clouds. And we're struggling when it comes to using cloud to our advantage and start making some money from it," Randhawa said. "Unless you do your own infrastructure hosting and provide some services in the cloud that you own and can start billing for, you can only get bits and pieces."

Rauch is aware that HP partners still have unanswered questions about the cloud. "We're hearing that partners need to get some clarity around the cloud, and how to monetize cloud. We want to meld what they do well with what we do well to put together an offering," he said.

Another example of HP guiding partners is Cloud Centers of Excellence, a program that gives infrastructure savvy partners training and financial support to build their own on-site cloud demonstration centers. HP is exposing its field sales force to Cloud Centers of Excellence, but only for use as a demand generation vehicle for the channel, said Rauch.

"Partners want to be able to show their skills to customers, and we believe this will get us from point A to point B, which is buying a private cloud," Rauch said.

HP's recent moves to become a private infrastructure service provider while also equipping partners to follow its lead is tied together with CloudSystem, a set of technologies that unite the control and delivery of cloud services on-and off-premise, from internal cloud services in the customer’s data center, to HP-hosted clouds or external sources such as Amazon EC2 services. These include HP BladeSystem Matrix, cloud service automation software, and Cloud Maps, pre-configured templates, workflows and deployment scripts that let customers quickly and easily build a catalog of cloud services.

By becoming a private cloud infrastructure service provider, getting partners on board with its private cloud vision, HP is casting a wide net for cloud dollars, and this flexibility is something Rauch believes will become an important competitive advantage.

"It's always going to be a hybrid delivery model. We want to go to market in a flexible way, enable partner to deliver their own set of services," Rauch said. "We're always looking for scale and market coverage."