HP Microsoft Alliance Highlights
- HP announces 4 ‘appliances’
- Microsoft announces 3 HP specific ‘Fast Track’ reference architectures
- The collaboration has cost $250m over 3 years
- Data Warehousing, Business Intelligence, Transaction processing and Consolidation Workloads define appliances
- HP needs Microsoft to produce integrated products
- Microsoft is learning about big server customer needs by working with HP
Microsoft and HP have spent $250 million over 3 years jointly developing business solutions: today they announced a number of integrated products as a result. Doug Small (HP) and Doug Leland (Microsoft) described the new solutions and approach in a pre-announcement briefing with analysts.
As we’ve seen before to call these ‘appliances’ is stretching the definition – in answer to our question the answer was that ‘appliance is a very loaded term’ which the team spent some time debating before deciding that it was the best word to describe hardware, software and infrastructure delivered as one unit.
What Appliances Are Microsoft And HP Delivering?
All of the offerings are branded as HP. They announced four appliances. In particular:
- HP Business Decision Appliance – the closest of the offerings to a pure appliance, this is a self-service Business Intelligence product with a combination of Excel 2010 PowerPivot, Sharepoint 2010 and SQL Server 2008 R2 pre-installed on a 2U HP rack-mounted server; pricing starts at around $30k in the US, with a typical 50 user system costing around $50k; it’s described as a mid-market offering aimed at workgroups of 80 and a maximum of 150; its fast deployment – HP claims to be able to get it up and running in around an hour – was appreciated by Red Wing Shoes – one of the announcement reference customers
- HP Enterprise Data Warehouse Appliance – in November 2010 the Microsoft introduced the SQL Server 2008 Parallel Data Warehouse, on which this is built; it has a massively parallel architecture which is said to run queries 40 to 200 times faster than on SMP architectures; it scales to 509TB for which customers would pay $6.6 million if the price of $13k per TB mentioned on the call applies; although the two companies have integrated thousands of components this is not an appliance
- HP Business Data Warehouse Appliance – coming in Q2 2011 there was not much discussion of this offering; we assume it will be a mid-market version of the ‘Enterprise’ appliance, designed as a backend processing, rather than the front-end of the ‘Decision Appliance’
- HP Enterprise Database Consolidation Appliance – while the two earlier offerings are available now, this product won’t be delivered until the second half of2011; the two companies term this a ‘private Cloud appliance’, as opposed to ‘workload specific appliances’ for the three others; it’s another big system with preloaded SQL Server 2008 R2 and Hyper-V (for which Microsoft achieved an overall market share of 19% in 2010 according to IDC); it will provide a platform to host 100s of virtual servers, complete with management software, metering and the ability to ‘charge back per use’
In addition they have announced 3 HP-specific Microsoft ‘Fast Track’ reference architectures – viz Data Warehousing, Database Consolidation and Transaction Processing. Figure 2 shows the roadmap for delivery. They also introduced the HP E5000 Messaging System (shipping later in Q1 2011) designed to provide a low cost per mailbox for customers upgrading their email to Exchange 2010, although this was discussed more as a result of the collaboration between the two companies than as an appliance.
Some Conclusions – HP Needs Microsoft For Vertical integration
2011 is becoming the ‘year of the appliance’, as we’re seeing big and large suppliers deliver simple (and fast) to deploy solutions incorporating a pre-integrated set of hardware and software components – see our analysis of Symantec published earlier this week for instance. Both Microsoft and HP are keen to stress the fact that all of these machines will be sold through Systems Integrators, although we believe the high price tag of the larger machines and the integrated solutions will be best suited to HP’s direct salesforce. The companies claim to have trained 10k internal and 1k channel staff on the new products. In fact HP indicated they had possibly spent more on the ‘go to market’ aspects of these solutions than the engineering and that very large size of the agreement will probably stop it from partnering in such a way with any one else.
In terms of the partnership there are a number of issues. For instance:
- We believe that HP needs Microsoft a lot: Windows Server runs on the majority of its servers and it lacks its own applications and tools, unlike IBM and Sun who can address a number of workloads almost exclusively from their own resources. It’s been a long time since All-In-One and the RDB offerings were jettisoned and its massive spending on acquiring software companies has been entirely in the infrastructure area.
- Microsoft doesn’t need HP as much, even if it is its biggest OEM and it will learn even more about customer needs in the large systems market through this collaboration. We suspect that HP will be getting most of the services revenues from this joint venture and it is difficult to see how Microsoft can become vertically integrated itself. It is highly unlikely that it will buy a hardware company and/or gives up its role as horizontal supplier to all x86 platforms.
While ‘appliance’ is a misnomer for machines which can scaled, upgraded and used for more than one purpose, it seems a good enough term for now. In any case the massive jump towards integrated solutions and vertical integration are more important. We will continue to stress the need for users to avoid ‘lock in’ and track the developing trends as always.
Let us know what you think about today’s announcement by commenting on this article.
ITCandor Acronym Buster
OEM – Original Equipment Manufacturer
SMP – Symmetrical Multi-Processing
TB – Terabyte