HP to Make Billion Dollar Investment in Cloud Computing

Hewlett-Packard Co has announced that it will spend US$1 billion over the next two years to develop and offer cloud-computing services. The Palo Alto, CA-based technology giant is gearing …

Hewlett-Packard Co has announced that it will spend US$1 billion over the next two years to develop and offer cloud-computing services. The Palo Alto, CA-based technology giant is gearing up to make available its cloud-computing platform OpenStack in 20 data centers in the months to come.

OpenStack provides a free and open-source cloud-computing platform for public and private cloud services. Last week, the Silicon Valley firm unveiled HP Helion, a portfolio of cloud products and services that offers to enable organizations to build, manage and consume workloads in hybrid IT environments.

“Customer challenges today extend beyond cloud. They include how to manage, control and scale applications in a hybrid environment that spans multiple technology approaches,” Martin Fink, executive vice president and chief technology officer, HP, said in a statement.

Cloud computing is one of the key drivers of today’s IT services market. According to UK-based Juniper Research, the global enterprise cloud computing market is on course to reach US$90.7 billion by 2018, with both Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) showing tremendous growth.

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HP’s competitors in the U.S., such as IBM and Cisco, have already made headway in this sector. Since 2007, IBM has invested more than US$7 billion in 17 acquisitions to accelerate its cloud initiatives and build a high value cloud portfolio. Amazon Inc, according to Reuters, has recently slashed prices of most of its cloud computing services to remain competitive, and Microsoft is hoping to grow its cloud customers 40-fold.

HP, traditionally a hardware firm, is seeing its business declining in the face of growing demand for cloud computing, wherein companies rely on service providers’ infrastructure instead of buying hardware themselves.

Instead of being weakened by the cloud computing, HP now wants to take advantage of the popularity of the computing technology.

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