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By | Gavin Clarke 23rd May 2014 08:24

HP's $1bn 'Linux for the cloud' dream: Will Helion float?

Plus: Why it wants to be like IBM, not Sun

Analysis Hewlett-Packard has committed $1bn to OpenStack, a Linux for the cloud, over the next two years.

The cash is going on R&D, products, engineering and services, HP said.

The company will iron out the kinks in the OpenStack code and make it work and try to sniff out OpenStack clouds on HP hardware out of the box.

To grease up the pump on HP's OpenStack business, CEO Meg Whitman is setting up an OpenStack professional services unit consisting of consultants and engineers.

In the background to all of this is HP’s OpenStack service, with OpenStack services available from 20 of HP’s 80 data centres in the next 18 months.

HP’s vice president in charge of building the company’s cloud products and services, Bill Hilf, told The Reg the $1bn is a “a bold statement” by HP.

“So many vendors put these big numbers out there… as we were preparing for this, we wanted to be clear this is not some fictional thing,” Hilf said.

HP appears to be modelling its bravado on the example of another big systems company: IBM, which also famously put its wallet where its Linux was. Hilf never mentioned it by name, though.

Twice, in 2000 and 2013, IBM committed to spending $1bn on Linux. $1bn was peanuts for IBM, as it is for HP, but in PR terms it got the world’s attention, which HP certainly seems to be grabbing now.

The gestures cemented IBM’s association with Linux, much to the chagrin of other firms, such as Oracle, whose people frequently complain that their firm's employees contributed just as much to the Linux kernel as IBM.

On the crowded OpenStack project that HP has decided is its ticket out of the commodity PC business, it will certainly want such an association.

IBM's Linux love - it was all about servers

IBM’s actual work on Linux in the 2000s wasn’t a philanthropic exercise - it gave IBM something vital in selling its x86 servers. It freed Big Blue from relying on single supplier Microsoft. IBM improvements to Linux and IBM server sales drove customer demand, which then drove improvements to Linux. Linux unhooked the enterprise data centre from its reliance on Windows and saw companies run both OSes.

HP hopes to emulate that push-and-pull effect on OpenStack for its hardware.

As for OpenStack, it could certainly use the patronage and focus of a large tech company. Billed from day one as the "Linux for the cloud" and an open alternative to Amazon's EC2, OpenStack hasn’t entirely fulfilled its promise.

Many in IT have put their names to OpenStack, but many have stayed mere watchers. More than half the work is done by RackSpace, Red Hat and “others".

The project has fallen to the worst of open-source navel-gazing and self interest, with people fiddling with the bits and sub-features they find interesting and losing sight of the bigger architectural picture.

HP’s chief operating officer for cloud, Saar Gallai, last week singled out OpenStack’s Neutron, to manage network devices as a service, as suffering major holes.

This is taking its toll. Four years since it was unveiled, OpenStack is a work in progress while Amazon is now chipping away at enterprise customers. Amazon went from from provider of plain-old-iron to full stack and ecosystem provider. It is the cloud version of what Windows became in the early 1990s.

Today you get companies like Bashton calling themselves a service provider but which actually owns absolutely no physical network service infrastructure – the company is an Amazon virtual software play.

Does Hilf see holes in OpenStack as opportunity or problem for HP?

Hilf is kind on OpenStack, saying it’s “young” and growing fast, but reckons HP’s got the chops to make it suited to the enterprise.

HHP will bring the experience from its Converged Systems to make changes to the OpenStack code in infrastructure, life cycle and workload management, and integration with HP systems and third-parties software he said.

HP is taking responsibility for the OpenStack code, with its a branded version – Helion, in two editions – community (free) and charged.

Hilf says HP decided to make Helion available because customers had struggled to get OpenStack running at scale and were begging for HP’s software.

HP Helion marketing from HP website

Hilf: We're not open-sourcing proprietary HP technology

“The number one thing I hear from customers is: ‘We took OpenStack and tried to run it across 5,000 different servers. Can we take OEM your public version of OpenStack because you are doing it at scale?',” Hilf says.

But others have cottoned on to this idea. Database giant Oracle and Linux shops Red Hat and Canonical each made OpenStack announcements of their own last week: both are also offering their own separate distros.

Canonical will provide Ubuntu hosting and OpenStack in an industrialised-looking and orange-coloured appliance.

Little is known about the Oracle technology while Red Hat seems to be mostly adding a management layer.

Hilf reckons HP's Helion is doing what Windows and Amazon achieved - scale and simplicity, opportunity without the headache of making the platform work.

The commercial version of HP’s Helion will scale to 10 – 20,000 nodes; will support third-party plug-ins; come with management tools; and run with a choice hypervisors and hardware. The community edition will be updated every six weeks too, to target devs but not conservative business types.

On this Hilf is clear: the model is Microsoft - opportunities accrue from real market share.

But open source has been a siren call for tech hopefuls also wishing to emulate the reach of Microsoft. Their MO has been to release a free edition of their code and persuade customers to buy the paid-for edition or services. The dream is Red Hat... the reality is Sun Microsystems.

Sun thought it could use open-source code to sell its servers while also becoming an open-source software company. It got bought by Oracle.

The lesson is eerie for HP, which - like Sun - is using open source to sell its hardware. Unlike Sun, HP is also using open source in a hosted service. “We are not taking proprietary Hewlett-Packard technology and releasing it as open source and expecting customers to pay us,” Hilf told us.

Hilf reckons the OpenStack market is still green enough for HP's strategy to work.

“It’s early in the game of when markets are emerging and market share is still up for grabs,” Hilf said. “The OpenStack market share is still completely green field so in these early days, the more we can get customers to adopt those technologies and see the value from what we are building, the better for long-term value.”

Let's come back to that $1bn and the IBM model and Linux.

In some ways OpenStack is like those early Linux firms. No one company dominated the Linux market and the enemy was easy and obvious – Microsoft with its proprietary Windows operating system and a costly licensing model.

But unlike those days, there is no high-cost rival - quite the opposite: Amazon has been cutting prices and killing the competition.

RackSpace was gung-ho on OpenStack, which it co-announced in 2010 with NASA. Four years on, RackSpace's quarterly revenue was up 16 per cent but income down 21 per cent. Its chief executive is leaving, while it's reported to have called in the bankers to help re-assess its future. It’s a comment on the high-growth, dwindling margins of cloud.

HP will need to do more than just build better code or ship OpenStack pre-loaded on servers. It must infiltrate the enterprise customers using Amazon and persuade them it is wise not to rely on a single (in this case cloud) supplier.

That, after all, is how IBM loosened Windows' grip on the workplace. ®

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