Earlier this week, veteran Silicon Valley media entrepreneur Tony Perkins took the stage to interview HP CEO Léo Apotheker at the OnDemand conference, hosted at HP headquarters in Palo Alto. With over 70 venture-backed CEO’s in the audience, it was a typical Valley scene full of enthusiastic hallway conversations and bright ideas.
After recounting Léo’s career path prior to HP, Perkins focused on the company’s recently announced cloud computing strategy, asking if the market trend towards cloud computing threatens to “cannibalize” HP’s market-leading server business.
This line of thinking assumes that if more enterprise companies purchase IT as a service via the Internet, total demand for servers will stop growing. Servers were a ~$48 billion market in 2010.
Léo responded that for HP the important macro trend is overall demand for servers continues to grow. Whether a server is in an enterprise client’s data center or the data center of a cloud service provider, it’s still a good market for HP. “We’re just moving the revenue stream,” he said, adding that HP already counts seven of the world’s ten largest cloud service providers as customers.
What’s more, the proliferation of mobile devices is playing a complementary role. The more people shift their IT consumption to cloud services accessed on mobile devices, “the more servers you need,” he said.
These very market dynamics were addressed head-on during HP’s March 14 strategy summit, where Léo and his senior leadership team publicly explained how HP’s core businesses provide the foundation to lead the two biggest technology trends of our time: cloud and connectivity.
By combining that core business foundation, the HP CloudSystem already shipping, a new suite of technologies delivered as a service, and connected mobile devices running webOS, HP’s portfolio would encompass the complete scope of what HP Chief Strategy & Technology Officer Shane Robison called the “cloud stack” – an integrated technology architecture for supporting today’s explosion of data and connectivity.
For related HP Labs research on exascale datacenter architecture, read “HP nanotechnology research looks to sustain HP server market leadership for the long run.”