HP backs away from public cloud business, citing competition and lack of profitability
Cloudy McCloud Cloud HP just said public cloud ‘makes no sense for us’ — Exec admits it's no Amazon, Google, or Microsoft — HP has finally conceded defeat in the public cloud wars …
Context & Ripple Effects
HP's public-cloud exit was foreshadowed for months: a February reorg stripped Marten Mickos of key cloud responsibilities, and just four days after this story an executive publicly walked back the 'makes no sense' framing while reaffirming commitment to OpenStack-based Helion. The concession didn't hold — by October HP announced it would shut Helion's public cloud entirely in January 2016.
First-order effects
- HP's enterprise customers weighing Helion against AWS, Google, and Microsoft lose a credible alternative, forcing migration decisions onto a shrinking field of non-hyperscale providers.
- HP redirects investment toward its remaining cloud-adjacent businesses — private and hybrid deployments — rather than competing on raw public-cloud scale.
Second-order effects
- The OpenStack ecosystem loses its highest-profile corporate champion, weakening the main vendor coalition built specifically to counter Amazon, Google, and Microsoft.
- Rivals still in the public-cloud race face pressure to prove unit economics HP couldn't, tightening scrutiny on every challenger's pricing and profitability.
Third-order effects
- HP's capitulation previews a broader pattern confirmed years later, when Red Hat's sale and the disappointing exits of Hadoop startups and Pivotal showed public clouds reshaping which business models survive outside the hyperscaler tier.
- If the pattern holds, enterprise infrastructure consolidates around a handful of hyperscalers while former competitors like HP retreat to selling hardware and services into someone else's cloud.
The trend: Enterprise IT is consolidating around a few hyperscale cloud operators, with would-be challengers exiting infrastructure to become suppliers to the winners.