Will Cloud Turn Around Troubled HP Enterprise Services?

Will Cloud Turn Around Troubled HP Enterprise Services?

HP is betting big on cloud, and according to one Technology Business Research (TBR) analyst, it—along with HP channel partners—may be the saving grace for the troubled HP Enterprise Services business unit.

Poor HP (HPQ). The technology giant is experiencing trouble, as indicated by CEO Meg Whitman only a couple of days ago during a Q3 2013 earnings call. As Talkin' Cloud noted in its coverage, HP failed to provide any evidence of cloud computing momentum during the quarter, and the company even scaled back its revenue expectations for the 2014 fiscal year.

However, the company is placing big bets on cloud computing and is hoping to drive that future success through its channel partners. Cassandra Mooshian, an industry analyst with Technology Business Research (TBR), noted that HP Enterprises Services is continuing to struggle and will likely weaken even more through the rest of 2013 and into 2014. But cloud—and partner success in cloud—may be the bright spot that could turn the struggling business unit around.

According to Whitman, key segments of HP Enterprise Services are growing by double digits. Basically, that means cloud and mobility. During the quarter, HP announced several new cloud services and cloud professional services in the hopes of bolstering its cloud presence and feeding business into its channel. Another key area may be HP's investment in OpenStack with the launch of Cloud OS, but the company has also invested heavily in its Converged Cloud Professional Services and its various cloud portfolio offerings connected to Enterprise Services.

Mooshian believes HP's next step is to work more closely with channel partners to increase those partners' cloud services go-to-market and delivery capabilities. The end result? The idea is to "boost its own cloud revenues as it aggressively tries to build cloud market share," she wrote.

"We believe channel partners will benefit from HP's increased focus on public cloud and cloud professional services in 2H13 as channel partners will seek to bundle public, private and hybrid cloud technologies with professional services to deliver end-to-end cloud solutions," Mooshian wrote.

That's some potential good news for HP's channel partners. How will HP fare? And will this focus on cloud be what the company needs to turn around its Enterprise Services group? Time will tell.

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