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Thursday 22 October 2015

HP gives up against Amazon

So the HP public cloud is no more. I suspect I might have been one of the larger users of it (for a few weeks back in 2012) so let me try to give a serious analysis of what this means. (HP announcement link)

Amazon AWS is currently supply-constrained. They could lower prices to gain more customers, but then they wouldn't be able to service those customers. This is an unusual position to be in, as almost all of us are in industries where the bottleneck to growth is in acquisition, not delivery. So they ease their prices down little-bit-by-little-bit as they resolve their supply constraints.

Eventually, AWS will start to be demand-constrained, and that's when all hell breaks loose, because then AWS can start doing some serious price cutting. I'd peg it for early 2017 at a guess, when suddenly the price cuts start accelerating until the economics for renting from AWS starts to look competitive with buying a server and putting it on a desk unsupported, un-networked and unpowered.

Google and Azure can survive Amazongeddon -- they have the money and it's a market that they definitely want to be in. Google App Engine is still a very cost-effective offering -- my total compute and storage budget leading up to launch day (and including it) for the Automated Estimator of Effort and Duration for Jira was $0.22 -- so much for big data analysis being expensive! At that level, price comparisons are utterly meaningless, so if that's profitable now (which is probably is), they can keep doing it.

HP have presumably decided that they don't have enough time to build out a solid customer base on the HP public cloud before Amazongeddon. The HP cloud team is betting that customers will want HP software to manage their clouds, and that an HP-backed public cloud is not worth doing. Operations Orchestration makes sense in a cloudy world, for example.

But there is a problem, because for all the talk of "hybrid public-private clouds", either private is cheaper/better/more secure or public is cheaper/better/more secure.

  • If the answer is "private", then we will continue to have internal customer-owned datacentres, and HPE will continue to sell 3PARs, SureStores, Proliants and so on. 
  • If the answer is "public", then after Amazongeddon, HP won't have a hardware business that anyone cares about.

Unfortunately, I believe the answer is "public", as do many, many other people. To say that "private" clouds are cheaper / better and more secure the majority of the time means that not only are there no economies of scale in a big data centre, that there are diseconomies of scale that are going to appear any moment now from out of nowhere.

This puts HP in the same position as Unisys was in the 1980s-1990s. Customers stopped buying Unisys mainframes, so Unisys had to turn into a services, software and support business. They had a bit of an edge in government and defence at the time, and they worked hard to keep it. I know plenty of people who have had good careers at Unisys, and presumably it's a nice place to work where there is innovation happening. But Unisys in 2015 is not the hallowed place that it was after the Burroughs / Sperry merger.

Without that core of hardware sales on which to stack software sales, Unisys struggled. So too will HP. (And so will Dell, unless Dell decides to take on Amazon... which they could and should.)

I feel sorry for Bill Hilf though, as he has had to lead teams through the collapse of high-end Itanium hardware and now through the failure of the only viable hardware future that HP had.

That said, I'm optimistic about HP Data Protector in particular. There will still be important data to backup and archive. Storing it efficiently for fast recovery will always matter. You can't discard a backup solution until the last of your 7-year-old backups have expired.

I'm hoping that HP will now do three things:

  • Convert the HP cloud object storage device to something that works with S3. Since this feature will be irrelevant in January 2016 if they don't do this, it seems like a no-brainer in order to preserve the R&D investment done so far.
  • Interface into lifecycle management of S3 -- if the "location" of a piece of media is "Glacier", then Data Protector should be able to initiate its re-activation as step 1 of a restore job. Again, this seems a no-brainer if you already are dealing with S3.
  • I'd like to see the Virtual Storage Appliance delivered as an AMI (Amazon machine image). This isn't very difficult. Maybe there could be some fiddling around with licensing where the VSA reported its usage and customers paid by capacity per month, but even that's not really necessary.
If all this happens, then I suspect we'll continue to see HP selling Data Protector for another 30 years. If Data Protector is still useful for customers post-Amazongeddon as it is pre-Amazongeddon, then there would be no particular reason that Data Protector couldn't pass through this critical tipping point. In fact, since I doubt that BackupExec will handle the transition, Data Protector will probably pick up some market share.

Anyway, what are some immediate scenarios would this support?
  • Customer A has a small Amazon presence and a large data centre with a StoreOnce system and some tape drives. They would like to deploy a VSA in the same region as their Amazon servers and replicate their data through low-bandwidth links back to their data centre. 
  • Customer B has a somewhat larger Amazon presence. They have Data Protector in their office, and they want to backup their Amazon content to Glacier. 
  • Customer C is closing down their data centre in house and moving their servers into the cloud. They want to take backups of their servers in their data centre and use StoreOnce replication to get them into their cloud where the data is rehydrated.
So if you are customer like A, B or C, feel free to contact to your account manager, suggest that you'd really like Data Protector to support you and see how you go. (Or get in touch with me and I'll collate some answers back to the product team.)

Greg Baker is an independent consultant who happens to do a lot of work on HP DataProtector. He is the author of the only published books on HP Data Protector ( He works with HP and HP partner companies to solve the hardest big-data problems (especially around backup). See more at IFOST's DataProtector pages at

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