HP acquires cloud startup Eucalyptus, for under $100M according to sources; CEO Marten Mickos will lead HP's cloud unit
HP Tests the M&A Waters With Acquisition of Cloud Startup Eucalyptus — Hewlett-Packard took another step back into the mergers and acquisitions market …
Context & Ripple Effects
The Eucalyptus purchase is HP's first concrete move since its $1 billion, two-year OpenStack commitment in May 2014, when the company folded its scattered cloud services under the HP Helion brand. Buying an OpenStack-compatible private-cloud startup for a reported sub-$100M price converts that brand promise into an actual product line.
Timing matters internally: just days before the deal surfaced, HP was making public internal Autonomy emails alleging 'imaginary deals' by founder Mike Lynch, and the company had spent August on a power-cord recall and Chromebook-priced Stream launches. A small, disciplined tuck-in acquisition reads as a deliberate test of M&A appetite after the Autonomy-era damage.
First-order effects
- Eucalyptus CEO Marten Mickos takes over HP's cloud unit, meaning the hybrid-cloud strategy now runs through the founder of the company whose software it just bought rather than through an existing HP executive.
- Eucalyptus's private-cloud technology gets folded into HP Helion, giving HP an on-premises AWS-compatible offering to sell alongside its existing enterprise hardware and services contracts.
Second-order effects
- Rivals selling OpenStack-based private clouds to enterprises — Cisco, IBM, Red Hat and the smaller OpenStack vendors — now compete against HP bundling cloud software into its server, storage and services deals, pressuring them toward their own acquisitions or deeper discounting.
- For Eucalyptus customers, ownership by a hardware giant raises the classic integration question: whether the standalone product roadmap survives being absorbed into a broader Helion portfolio.
Third-order effects
- If sub-$100M capability buys become HP's template, enterprise infrastructure consolidates around hardware incumbents assembling hybrid-cloud stacks piece by piece rather than building public-cloud scale themselves.
- The pattern points toward a market where enterprises buy managed hybrid clouds from their existing hardware vendors, shifting competition from raw compute price to integration and management tooling.
The trend: Legacy enterprise hardware vendors are responding to the hyperscalers not with their own public clouds but with serial acquisitions of small cloud-software startups assembled into hybrid offerings.