What HP's Buyout of Eucalyptus Could Mean

NEWS ANALYSIS: The acquisition of private cloud vendor Eucalyptus could either confuse HP's cloud strategy or consolidate its position. Time will tell.

HP Acquisition of Eucalyptus

Hewlett-Packard announced on Sept. 11 that it had acquired privately held cloud vendor Eucalyptus. The deal—the financial terms of which are not being publicly disclosed—raises questions about HP's cloud plans.

It's a deal that will see Eucalyptus CEO Marten Mickos take on a new leadership role as senior vice president and general manager of HP's cloud business. It's also a deal that could either confuse HP's cloud strategy or consolidate its position.

HP has been one of the strongest supporters of the open-source OpenStack cloud platform. Eucalyptus is not OpenStack, but rather has been largely positioned as a rival technology that pre-dates OpenStack.

I first wrote about Eucalyptus in 2009, when the company raised its $5.5 million Series A round of funding. The Eucalyptus open-source cloud infrastructure project was originally developed as a research effort at the University of California, Santa Barbara (UCSB). The core focus and goal of Eucalyptus from its origins was to enable organizations to build their own Amazon-compatible private cloud. It's a goal that resonated early with a number of firms, including Canonical, the lead commercial sponsor of the Ubuntu Linux distribution.

The first Ubuntu Enterprise Cloud (UEC) technology release in 2009 was based on Eucalyptus technology. Eucalyptus further enhanced its image in March 2010, when former MySQL CEO Marten Mickos took over as the company's CEO.

When Mickos was hired, the prospects for Eucalyptus were still bright. But then the market changed dramatically with the rise of OpenStack, which was first launched in July 2010. With OpenStack, instead of an open-source project that was just trying to emulate Amazon's cloud, there was suddenly a vibrant project that sought to eclipse Amazon and build something much more powerful.

By May 2011, Canonical had dropped Eucalyptus as the primary default technology in the Ubuntu Enterprise Cloud in favor of OpenStack. Momentum was clearly on the side of OpenStack, and Eucalyptus has not ever truly regained the pole position it briefly held.

Helion Cloud Initiative

HP recently reinvigorated its entire cloud strategy with its Helion cloud initiative. In May, HP announced a $1 billion investment in Helion, which is an OpenStack cloud effort. One of the leading voices at HP behind Helion is Bill Hilf, senior vice president, product and service management, HP Cloud. Plus, Saar Gillai, now senior vice president and chief operating officer for HP Cloud, has also been responsible for the company's overall cloud efforts.

Putting Eucalyptus' CEO Mickos into the mix adds another cook to that kitchen. Whether there are too many cooks remains to be seen. If history is a guide, however, Mickos might not last all that long at HP.

After selling open-source database vendor MySQL to Sun Microsystems for $1 billion in 2008, Mickos lasted only a year half as a Sun executive, before walking away in February 2009. Oracle ended up acquiring Sun in 2010. While one could argue that HP is more stable than Sun was at the time, it's easy to argue that HP is also a company in a state of transition.

Although many executives from the Sun era have long since left Oracle, others like John Fowler, who leads Oracle's systems business now, have remained and prospered.

Eucalyptus Technology

I don't think Eucalyptus has much of a life span, either. Simply put, Amazon compatibility is a feature, not a platform in and of itself. What's more, OpenStack already includes its own set of Amazon-compatible APIs—which minimizes the need for the technology that Eucalyptus provides.

HP also has long had its own multi-cloud technology platform called CloudMatrix. Certainly, Eucalyptus technology can be used to complement existing HP solutions, but the longer-term direction is likely integration into existing efforts.

The acquisition of Eucalyptus by HP is a good move for the larger OpenStack community as it removes a potential competitor and a point of confusion in the cloud marketplace. It might also lead to improved Amazon support in OpenStack, though existing support was already reasonably solid.

With the acquisition of Eucalyptus, HP is helping consolidate the cloud market. Time will tell if it's a move that will yield dividends and provide any competitive differentiation or new leadership for HP's cloud efforts.

Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.

Sean Michael Kerner

Sean Michael Kerner

Sean Michael Kerner is an Internet consultant, strategist, and contributor to several leading IT business web sites.