Cloud28+ takes global stage within HPE
Friday, December 12 2017
Cloud28+ was launched in 2014 by Hewlett Packard Enterprise (prior to its split from HP) as a European community of service providers, hosters, co-location providers, channel partners, ISVs and end-customers, all pursuing a common objective to accelerate enterprise cloud adoption. A key aim was to create a catalog of cloud services complying with upcoming EU security and data privacy regulations, such as GDPR, delivered by a “federation” of cloud providers and their channel partners across the 28 countries of the European Union. Initially, however, Cloud28+ sat on the periphery of HPE’s global strategy. Members would meet regularly, share best practices and contribute toward building a combined cloud marketplace. But Cloud28+ had little dedicated budget and was largely confined to Europe. Although part of HPE, it was managed as a community-driven entity of which HPE was the driving sponsor. It wasn’t closely integrated with HPE’s service provider or channel organizations and sat uneasily alongside HPE’s global efforts to build its own public cloud.
Since then, a change in HPE’s strategic direction has elevated the importance of Cloud28+. At the start of 2016, HPE pulled the plug on its own public cloud offering, Helion Cloud, as it acknowledged the growing challenge of both supplying and competing with hyperscalers, including Amazon Web Services, Microsoft and Google. In April of this year, HPE announced it would withdraw from selling commodity servers to these hyperscale customers, precipitated by a steep decline in shipments into this group (in particular Microsoft). In October 2017, HPE dissolved a joint venture with Foxconn specifically aimed at serving the cloud server market.
As a result, HPE is now more dependent on smaller service providers (below the global hyperscalers) building their own data centers to deliver cloud services, along with enterprise customers pursuing hybrid IT strategies. HPE’s service provider strategy centers around three objectives: to help service providers develop “revenue generating solutions”; to provide them with the infrastructure to deliver these solutions – with a growing emphasis on flexible business models, such as financing, which allow them to be “asset light”; and to create the go-to-market partnerships, which help SPs to extend the reach of their service offerings. Cloud28+ is becoming a core component of this strategy, as a vehicle to engage with these service providers, co-develop solutions with them, and help them generate demand and extend their market reach by connecting them with resellers with local customer relationships.
At the end of 2016, the community was opened up globally, giving a significant boost to membership. This has now grown from around 120 companies in 2014 to over 700, spanning North America, LATAM and the Middle East and Africa. Cloud28+ members now offer over 2,900 cloud services from 406 data centers located in 33 countries (although more than 70% of these are still located in EMEA).
Importantly, HPE is now positioning Cloud28+ as its de facto “public cloud”, implying that customers looking for public cloud services will be directed to members of the community that deliver these services. Internally, its importance has also been elevated. Xavier Poisson, the architect of Cloud28+ in EMEA, is now worldwide VP of both Cloud28+ and Service Provider business, which were previously managed separately. It continues to follow a community-led model, with HPE as lead sponsor. But Cloud28+ sits under HPE’s Indirect Organization, led by global channel head Paul Hunter, helping to drive closer integration with HPE’s go-to-market initiatives. The key requirement for partners joining Cloud28+ is membership of one of HPE’s Partner Ready partner programs, either Service Provider or Solution Provider programs (although ISVs, SIs and end-users are exempt).
This is helping to attract greater numbers of high-profile members to the platform. In July 2017, Microsoft joined Cloud28+ as it seeks to promote Azure Stack. Rackspace joined in September 2017. Intel has been a member since 2016. The group has an ever-growing list of leading SIs (eg. Deloitte, Accenture, Sogeti), cloud service providers and even distributors (including Also and Computer Gross), along with many of HPE’s core infrastructure resellers, such as Atea, Bechtle, Cancom and Computacenter.
Can Cloud28+ deliver on its global promise?
It can be difficult to measure the real business success of Cloud28+, and HPE is reluctant to publicize that data. An enlarged global membership doesn’t necessarily translate into significantly higher revenue for HPE. A proportion of partners may choose to join to be “part of the club” and benefit from HPE’s investments without contributing significantly themselves. The community tends to measure itself in terms of softer metrics, such as number of articles published to the site, offerings viewed, or value of leads received, rather than the real business closed. HPE does not charge members to join or take a fee from the sale of cloud services that members generate. Beyond requiring membership of one of its partner programs, HPE doesn’t explicitly require members to deliver their cloud services from HPE infrastructure, or to purchase HPE software or services.
Cloud28+ describes itself as the world’s largest cloud aggregator. But while some apps can be deployed from the site, most of the cloud services listed cannot be bought or provisioned directly. Prospective users can either register their interest and ask for a quote, or are directed to the partner’s own website. This means customers can’t use it as a true aggregation platform, in the sense of a single point of purchase, provisioning and billing.
This creates some questions over the future role of Cloud28+. Does it remain predominantly a marketing engine - both for HPE to market itself to this community and for its members to market themselves to end-users - and an enabler of partner “ecosystems”? Arguably, for example, a service catalog is more important as a discovery tool than as a purchase destination for end-users. If so, HPE is advised to leverage its own brand more effectively and increase investments in marketing the platform. Or does HPE seek to capitalize more on Cloud28+ as a revenue generator? If global management is committed to the initiative, it is likely to seek to do both. HPE is creating “Service Provider Ready Solutions” built on Synergy, ProLiant, Apollo, Nimble and other HPE technologies, which SPs and resellers can take to market through partnerships with Cloud28+ members, from large vendors such as Microsoft and SAP to specialist ISVs such as Ormuco. These include managed private cloud, SAP Hana-as-a-service, HPC-as-a-service, Azure Stack and backup and archiving-as-a-service, among others. At the same time, HPE is increasingly incorporating Cloud28+ into its broader hybrid IT strategy, for example integrating it into its new hybrid cloud management platform, OneSphere, announced in November. This will allow enterprise customers to manage both their on-premise environments and cloud services consumed from Cloud28+ using a common management system.
2018 will see an acceleration in hybrid IT and multi-cloud adoption by enterprise customers. At the same time, public cloud providers AWS, Microsoft Azure, Google and others will continue to grow rapidly, while investing more in local data center presence to meet demand for data sovereignty and compliance, particularly in EMEA and APAC. This poses the biggest challenge to many Cloud28+ service provider partners, forcing them to make decisions about whether to maintain their own data centers or move to managing third-party cloud services. Through Cloud28+, HPE needs to help these customers to both create differentiation and stimulate end-user demand for their services as part of hybrid models adopted by enterprise customers. The question is whether this will be enough to stem the coming tide.
For more information:
Canalys APAC: Singapore Tel: +65 6671 9399 or
Shanghai, China Tel: +86 21 2225 2888
Canalys Americas: Palo Alto, USA Tel: +1 650 681 4488
Canalys EMEA: Reading, UK Tel: +44 118 984 0520