Tuesday, May 27, 2014

HP's Helion Cloud Initiative

HP’s Helion Cloud Initiative

It is not often that one sees a major corporation undertake an effort to remake itself. GM is the most recent example that comes to mind. However, GM needed a bankruptcy to force the issue. HP is embarking on a major transformation of its internal structure not under the pressure of bankruptcy, but by a drive to spur organic growth in key business initiatives by increasing innovation and implementing new technology. HP calls this “The New Style of IT,” and it includes cross-company initiatives such as Cloud, Big Data, Mobility, and Security. As part of this, HP’s cloud initiative continues under the new “HP Helion” brand.
Let’s examine what HP is up against as we assess their chances of success. HP has funded Helion with an initial amount of $1 billion over the next two years. The amount certainly signifies how seriously they take this effort.  This follows HP’s consolidation during 2013 and 2014 of disparate cloud-related products and services across the company into a new HP Cloud business unit, which combines all of their cloud portfolio. Effectively, many people will find themselves in new organizations. They will have to determine how to work with new colleagues in different relationships and changed responsibilities. While it is easy to announce such a change, a lot of hard work will be necessary to get these units functioning.

Next, the long range goal involves the integration of other HP products into the Helion world. For example, they will have to incorporate  Helion into HP Converged systems along with hundreds of other products, some of which will require major efforts in themselves. Another long range project will incorporate Helion into HP’s roughly 80 worldwide datacenters[1]. Martin Fink, leader of the Helion effort, says that the datacenter effort should take the next 18 months.

HP plans to roll out several projects this year. The first is a distribution (distro) of software to the Helion Cloud Community based on the Icehouse release of Open Stack. A free version of the software[2] is available now. HP plans a free release of updated versions every 6 weeks. Later in the year, HP will release a for-fee commercial version that scales much higher, supporting more users and VMs than the free version. It includes bundled-in support.

We have several suggestions for HP. For the new cloud organization to be successful, it needs to be very creative. Therefore, HP leadership should carefully consider the physical arrangements they make for the new unit. Steve Jobs spent a lot of time with the architects of the new Apple headquarters to ensure that the design would encourage and foster the creativity of the people working there. HP cannot afford (nor do they need) to redesign all their facilities. However, they could find a facilities review well worthwhile[3]

We also suggest that HP reconsider how they measure success for each new Helion distro. Executives were very proud they released their distro only three weeks after OpenStack’s release of icehouse. Clearly, today’s emphasis must include time-to-market, but speed cannot risk compromised quality. HP’s commitment to a new release every six weeks needs to be reevaluated. We believe that customers appreciate that quicker releases means that faster access to fixes and new functionality. However, they would be happier with 8 week intervals if the delay meant a better tested/more reliable release.  If time is needed for better quality, HP can tell the customers that they are taking that additional time without making much fuss. In fact, it might just be better to commit to the slightly longer interval.

We must also mention that although we are admirers of Martin Fink (we knew him when he did an excellent job in Linux), we do not think that having him wear three hats as HP’s CTO, Research Director, and manager of Helion[4] is really viable for an extended amount of time. Each one of these efforts requires (and should have) a full time executive. HP risks a lot by delaying recruitment or identification of these people.

In summary, we view this Helion rollout as a further, very positive development of Meg Whitman’s strategy for HP. In particular, the ongoing financial turnaround of the company that has proceeded well so far has made this Helion strategy practical.  It has made possible the $1 billion dollar investment funding Helion. HP customers and stockholders have a lot to cheer about at this point. However, Helion success will require wrenching changes at HP. HP management faces a real challenge making this initiative work. We are encouraged by their evident planning and efforts so far.

[1] HP has announced that 22 datacenters will implement Helion by the end of 2015.
[2] Service is a priced option.
[3] Whitman is consolidating the Helion group into several locations and gradually moving some of the telecommuters back into the office. Sounds like a reasonable strategy to us.
[4] He has other  management responsibilities has well.