A few weeks ago to the surprise of hardly anyone, HP announced it was shutting down its public cloud business. Last week, CEO Meg Whitman announced that the company would bridge its public cloud gap by teaming with Microsoft Azure, a remarkably smart move for both companies.
Let's not forget that HP split into two companies at the beginning of this month, becoming Hewlett Packard Enterprise and HP. The cloud part of the company falls under HPE.
Effectively, this means that when HPE sells public cloud services, it will sell Microsoft's instead of its own. This could be important for both companies for a couple of reasons. In fact, it's not unlike the deal Microsoft cut with Yahoo! some years ago to run Bing, Microsoft's search engine, giving Microsoft much more reach.
By the same token, the combination of HP, which was barely registering in terms of public cloud marketshare, and Microsoft, which is a distant second behind Amazon Web Services, could be more powerful than either company trying to sell its own individual services.
What's that mean?
For Microsoft, it means a company the size of HP is pushing Microsoft services to its enterprise customers, giving it another massive salesforce to sell its products. It's true that HP's enterprise cloud strategy remains a bit of a muddled mess these days, but having a large partner pushing your services is always going to be a good thing, opening up your market to new opportunities without any heavy lifting.
For HPE, it means they can continue to offer public cloud services to companies that want them without having to worry about maintaining the public cloud infrastructure. They simply act as a sales conduit for Microsoft, and everyone wins.
It would be a mistake to think that this move should scare AWS, which has a substantial marketshare lead, but it's the kind of alliance that should make AWS nervous. If more companies recognized that by banding together they could present more substantial competition than they can offering their own individual products, it could be a worrisome trend for AWS.
Just last week, Google bought startup bebop and hired its CEO, former VMware CEO Diane Greene, to run its enterprise cloud business. The consensus was that this move should help shore up Google's enterprise cloud business and put it in a better position to compete with — you guessed it — AWS.
All of these moves are designed to help companies compete with the market's biggest player. Most people I talk to feel that AWS is going to be hard to beat. Regardless, these companies are facing a fierce competitor in AWS, one that continues to innovate and build on its lead, even as the competition makes moves to try to reduce its domination.
You can't blame these companies for trying to get creative. They've learned that what they've been doing just hasn't been working that well, and if they're going to give AWS a run for its money, it's going to take more than the status quo.
Photo Credit: Col Ford and Natasha de Vere on Flickr. Used under CC 2.0 license.