You can't be too rich, too thin or have too much computing power, but you can spend too much money. Since the first server went into a rack, enterprise IT departments have been balancing cost and performance in the data center. HP's ProLiant BL660c Gen8 blade server and DL560 Gen8 server give them new ways to stack the odds. 

The single largest operating cost in most data centers is power, and while estimates vary, as much as 50% of that power goes for cooling. Big data, social media and the proliferation of cloud-based applications and mobile clients have spiked demand for server-side processing and throughput. As the installed base grows, so does the cost of energy, further straining IT budgets.

In response, HP is leading the server industry's focus on server efficiency. By optimizing power consumption and increasing server density, data centers can significantly reduce their energy needs. Density coupled with increased processing capabilities provides a more compact management environment for administrators, while producing a much greater compute output for a given floor size.

HP's latest additions to the ProLiant Scale-up (four or more sockets) portfolio have taken the next steps toward addressing power, performance and floor space congestion. Featuring Intel® Xeon® E5-4600 processors, the BL660c Gen8 and DL560 Gen8 were built to deliver industry-leading performance for compute-intensive applications, while reducing the overall infrastructure and management burden. The results are impressive.

Savings

The most noticeable features of both the BL660c and the DL560 are embedded intelligence and size. While they offer the computing power of many 4s/4U servers, the DL560 is just 2U high. The BL660c is a full-height, single-slot blade. By increasing server density and enhancing energy efficiency, data centers can reduce their overall rack space profile, cooling requirements and power consumption. As a result, HP estimates break-even times of as fast as three months.

HP has built in a number of embedded technologies to automate these savings. For example, Automated Energy Optimization builds a heat map of the entire server, boosting cooling resources where they're needed and slowing them where they aren't.

Manageability

Human resources have a cost, too. Optimizing administrative tasks can reduce the amount of time IT spends on routine management - freeing staff to create more value through innovation.

The new ProLiant servers score here as well. HP's ProActive Insight Architecture provides monitoring and automation tools that can reduce the administration workload by up to 69% by assisting provisioning, monitoring, diagnostics and support, thus allowing IT staff to better support corporate business strategies. 

From the hardware up, the BL660c and DL560 were built for serviceability. All four CPU sockets and memory modules are placed on the system board for easy access, and the FlexibleLOM card slot replaces the embedded LAN on the motherboard to give administrators a wide variety of options for fabric, port quantity and chipset. Additionally, the DL560 provides up to six full-height card slots (two of them full-length) for maximum flexibility. There's even support for 150 Watt cards.

HP's Integrated Lights Out (iLO)

Performance

Savings and efficiency don't matter much if the server can't perform. The ProLiant BL660c and DL560's balanced architecture enable them to command top spots in all cases. Leading SPECjbb2013 and SAP SD 2-tier benchmarks demonstrate the servers' suitability for business processing implementations - including databases, Enterprise Resource Planning (ERP) and batch processing - and the combination of the industry's top floating-point calculations and super-fast PCIe Gen3 I/O provide more than enough horsepower and bandwidth to handle High Performance Computing (HPC) jobs – particularly as control nodes. Finally, in the omnipresent virtualization space, the ProLiant BL660c and DL560 hold the top spots for dense 4-socket servers. High scores across-the-board show that the ProLiants are solid, well-built machines - not just generic servers "cooked" to score well on a specific test.

The Optimum Workloads

Dense 4-socket (and greater) servers like the BL660c and DL560 really show their value in situations that require fast I/O, heavy threading and large amounts of memory. Traditional IT infrastructure operations are often fairly low-demand, so unless you're operating at an incredibly large volume or plan to grow quickly, you may be able to get by with lower-cost, 2-socket servers, like the HP ProLiant BL460c Gen8 server blade or DL360p Gen8 rack server.

Four-socket servers are best-suited to applications demanding large numbers of cores, database threading, or high numbers of VMs.

As you step up your processing load and number of connections, though, the BL660c and DL560 come into their own. Virtualization, business intelligence and business processing are full of potential bottlenecks that won't slow them down. These Gen8 servers are ideal for replacing aging RISC/Unix systems as well as demanding database workloads - either bare-metal or virtualized.

Much more than some Frankenstein's monster artificially packing in resources to make the form factor more dense, the BL660c and DL560 Gen8 servers deliver all this in a well-architected, superbly built package without compromising on performance, scalability or efficiency.

Intel, the Intel logo, Xeon, and Xeon Inside are trademarks or registered trademarks of Intel Corporation in the U.S. and/or other countries.

Leap Motion, creators of a motion-control device that allows interaction with a computer interface through hand movements, has announced a partnership with Hewlett Packard that will embed gesture control directly within HP hardware and get this technology out to more mainstream consumers.

The Leap Motion device was already scheduled for a standalone launch on May 13, and the announcement calls for it to be bundled with HP products beginning this summer.

The deal will have Leap Motion's AirSpace app store pre-loaded on HP laptops and PCs and have Leap Motion technology embedded in future HP devices. Although the companies declined to share a time frame for when HP's Leap Motion-embedded devices will hit the market, the combination could help HP become an early leader in the motion-control movement. 

(See also This Tiny Gizmo Could Be A Very Big Deal In 2013 - And Beyond.)  

How HP Helps Leap Motion

"They were a logical choice for us with their sheer distribution and their worldwide footprint," said Leap Motion's president and COO Andy Miller, of getting involved with HP.

That seems to encapsulate this symbiotic partnership: HP may be a struggling hardware titan, but it has the global reach and R&D muscle that Leap Motion needs to push its device from nifty niche product into mainstream hardware companion. On the flip side, Leap Motion infuses some cutting edge functionality into generic HP devices. 

It's a win-win if Leap Motion takes off like many predict it will. Miller claimed the device has received "hundreds of thousands" of pre-orders from nearly every country in the world.

Leap Motion Looking For More Licensing Deals

Beyond HP, Leap Motion is remaining tight-lipped about additional deals. "We are anxious and encouraging of folks to license our technology, non-consumer as well," Miller said. "We've had conversations about robotic surgery, automotive, fighter jets, data visualization... and any place where there is a cleanliness aspect where you can't use touch - like in an operating room or clean room or even fast-food kitchen." 

The device is currently available for pre-order for $79.99 from LeapMotion.com, BestBuy.com (for U.S. only), and Amazon.uk for United Kingdom customers. 

Image courtesy of Leap Motion. 

After speculating about the cost and power of the new HP Moonshot miniservers, we have some answers. Let's just say that HP has put together a pretty compelling sales pitch. Now to see whether Moonshot ends up being Apollo 11 — or Apollo 13.

As reported earlier today, Moonshot servers are small, cartridge-like miniservers that take up only about 6% of the same space that a current, full-fledged server does. These cartridges can be slotted into enclosures, known as the Moonshot 1500 chassis, which will hold 45 of the microserver units. A standard server rack can presumably hold anywhere from 10-40 enclosures, similar in look and feel to the Project Redstone development server configuration pictured below.

This miniserver configuration will use 89% less power than a standard server, according to early reports. From a cost standpoint, that's huge. Not only are you knocking down your electric bill by nearly 90% per server, but low-power chips mean far less heat energy is created from voltage leakage and alway-on processors. Less heat means less money spent on cooling.

So What's The Damage?

When you first hear the $61,875 starting price tag for the Moonshot 1500 chassis, it doesn't sound cheap. Granted, there's more hardware in there, such as 8 GB of memory plus management, networking, storage, power cords, cooling components, direct attached disk drives and network switches. But still, that's not exactly bargain basement.

Until, that is, you read the claims from HP that estimate the cost of one of these machines is 77% less expensive than the equivalent computing power of a standard server configuration. In other words, you would theoretically have to cough up $269,021 to get the same computing oomph.

Sure, that's a sales pitch. But it's an attention-getting one.

Houston, We May Have a Problem

Of course, no launch goes off without a hitch, and the first one was readily apparent just off the launchpad. Despite early reports that HP Moonshot miniservers would be configurable with a variety of different processors, such as 32- and 64-bit ARM chips, the initial release is shipping with only Intel Atom 1200 chips.

That's actually not too surprising, unfortunately. ARM-based servers still suffer from the enormous amount of forking and fragmentation in the ARM universe, and so haven't yet grabbed the attention of the development community. HP has done the right thing in being cautious about something the market may not yet be ready for. But it would have been nice if one major vendor had started the ball rolling with a significant ARM server release.

Despite the turbulence, if the hardware and performance specs hold up to real-world use, then it's likely that HP has a real hit here. Expect HP to tout the energy savings aspects of these machines, hard in order to attract IT managers with promises of lower electric bills and operating costs. If customers bite, HP may reach the moon after all.

Image courtesy of Wikipedia

If anything, give HP credit for historical parallels: when John F. Kennedy wanted to shake the U.S. out of a calamitous post-war funk, he gave Americans something to shoot for: the Moon. It's very much in that spirit that HP's management is hoping their latest Moonshot server product line will revitalize a company that's been mired in declining hardware sales.

Based on early indications, there is a good chance that this launch will be successful.

Moonshot is not your typical server, with a single set of processors and memory storage sitting in a racked box, just one among many such boxes tightly networked together in racks and racks of such servers, filling up data centers, sucking in power and pumping out heat like a furnace. No, Moonshot is very much different.

What We Know

Reports have indicated that Moonshot servers will be small, cartridge-like devices only take up 6% of a current server's space. Cartridges can be slotted into enclosures that will hold 45 of the microserver units. It is estimated that a standard server rack can hold anywhere from 10-40 enclosures, similar in look and feel to the Project Redstone development server configuration pictured above.

This configuration will use 89% less power, early reports have stated. From a cost standpoint, that's huge: not only are you knocking down your electric bill by nearly 90% per server, but low-power chips mean far less heat energy is created from voltage leakage and alway-on processors. Less heat means less money spent on cooling.

"To put in that perspective, if just 10 large web services providers switched their traditional x86 servers to Moonshot, they could save a combined $120 million in energy operating expense and nearly one million metric tons of CO2 per year. The equivalent of taking over 180,000 cars off the road for a year," CEO Meg Whitman said on a recent HP earnings call.

Another unique feature of these devices: they aren't tied to a single type of processor. Sure, there's Intel chips in there, represented in the form of the low-power Atom processors, but there's also support for ARM-based chips as well, from a variety of manufacturers. Multiple flash-based or standard hard drives are supported, too.

That means you can order exactly the hardware combination you need, instead of trying to port your applications to a single rigidly defined hardware platform. Theoretically, you could build a single private cloud that would run applications built for multiple architectures, each application talking the the Moonshot unit that has the architecture it needs.

What We Don't Know

The big unknown, at this point, is how much these microservers will cost. That's going to be a key difference to whether these are truly going to reach their destination or just fizzle on the launchpad.

Looking at HP's ProLiant Gen8 servers, the low-end starts at $885 for the DL100 model, and $899 for the starting DL300. The question is, how many Moonshots equal the equivalent in processing power and storage of one of these full-sized server? If you tell me, hypothetically, that it would take five Moonshots to equal one DL100 (and trust me, I have no idea at this point) and each Moonshot costs $250, then that would be a problem, even factoring in the expected overhead for the customization costs that might be built in to the units.

But, tell me that Moonshots will cost $150 with the same hardware specs, and I'd be all ears.

Until we get the details on the price and the specs, there's no telling how successful these will be. If HP were smart, they wouldn't price these things out of the ballpark… and not just to attract sales from existing standard server owners. They also have to make prices attractive to keep potential customers from shifting over to a public cloud environment - a more difficult scenario every day as providers like AWS and Google keep lowering their prices.

And even if Moonshots do take off, expect this to be a slow launch. Like the first moments of a Space Shuttle launch, when the rockets seem to just creep upwards, so too will Moonshots take a while to be widely deployed. Developers have to figure out how to work with them, and IT managers have to find reasons to put them on the procurement lists. To take off in the private cloud sector, there needs to be support from platforms like OpenStack and CloudStack soon.

A lot is riding on this launch for HP, which could bring change to the IT industry as a whole: if a truly flexible low-power system can be introduced, the potential for savings and environmental benefits for the enterprise will be impossible to ignore.

Image courtesy of HP.

Remember when "Other" was just a rounding error in market share reports? Now in the server market, it just might be the main event, as Facebook's Open Compute project, cloud computing, and other trends drive buyers to no-name server vendors instead of IBM, HP, and Dell. Time to short the incumbents?

According to new research from Gartner, server veterans like IBM and HP took a beating last quarter, with shipments plummeting 11.5% and 5.9%, respectively, contributing to an overall 0.2% server shipment slowdown. Meanwhile, so-called "whitebox" vendors that make up the "Other" category saw a 22% rise in revenues, and now account for 35.2% of global units shipped. IDC's market data showed largely the same incumbent malaise, with "Other" pumping revenues 14% year-over-year.

It used to be that such whitebox vendors like Quanta Computer, Wistron and Compal Electronics, all based in Taiwan, could be counted on to quietly build products for their name-brand American partners like Dell. No more. As Chris Gonsalves reports, companies like Google and Rackspace have looked to tailor servers to their requirements by going direct to Taiwan's leading ODMs, which has encouraged these vendors to start selling directly to more traditional enterprise accounts.

It's only going to get worse for the incumbents.

Cloud: Friend or Foe?

After all, the whole focus of cloud computing is to commoditize the server, making it a compute resource enterprises rent rather than buy. While not all workloads will move to the cloud, a big percentage will. In the cloud, enterprises simply aren't going to care whose logo sits on a box they can't even see.

And for those who do persist in managing their own datacenters, things like Facebook's Open Compute project may drive enterprises toward designing in lots of "Other." While Open Compute may not matter to most mainstream enterprises, as Mark Hachman points out, it's one more pressure point that incumbent server vendors could do without.

(See also The 5 Big Questions Dell Will Have To Answer To Survive.)

Ironically, the very thing that most threatens legacy server vendors could also save them, and then ruin them anyway: cloud.

IBM just announced it's getting behind OpenStack in a big way, basing all of its cloud services and software on an open cloud architecture. HP and others have also committed to OpenStack or other cloud platforms. Rather than be cannibalized by the public cloud, these server vendors are trying to extend their brands to private clouds, allowing enterprise customers to rent what they used to buy.

The problem, however, is that these vendors might be too successful. 

A Catch-22 in the Cloud

While public clouds like Amazon's AWS have been on a tear, they've still largely been relegated to test and development workloads. What happens when IBM and HP help make CIOs comfortable with the cloud? It's possible that those risk-averse CIOs will stick with the tried and true incumbents. 

But it's just as possible that once enterprises get comfortable with running mission-critical workloads on a private cloud that carries a shiny Dell logo, they'll take the next step into the public cloud, projected to be a $131 billion market by 2017, according to Gartner. Amazon has long argued that the real benefits of cloud computing are lost when trying to replicate them in private cloud deployments. While it's possible that IT will effectively mimic the public cloud, it's just as possible that developers and line-of-business executives will take their CIOs newfound enthusiasm for the cloud and run with it...straight to Amazon, Rackspace, or another public cloud provider.

In so doing, they'll inadvertently be growing "Other's" share of the global server market... and legacy server vendors' desperation to embrace the very thing that may kill them: the cloud. 

Image courtesy of Shutterstock.

Having failed to carve out a place for itself in the post-PC era, Hewlett-Packard is now taking drastic measures — by adopting Google’s Android operating system to run a series of upcoming mobile devices.

It’s a bit of a Hail Mary pass for HP, which has fallen years behind its rivals in the mobile space. It’s also a big win for Google, which adds another powerful partner to the Android ecosystem.

HP’s first Android device will be a high-end tablet that is powered by NVIDIA’s Tegra 4 chip, and it could be announced soon, according to two sources familiar with the matter (the sources spoke on the condition that they not be named because they are not authorized to discuss unreleased products).

The tablet has been in the works since before Thanksgiving and sources say it could be one of the first tablets to ship with the Tegra 4. NVIDIA’s latest mobile chip was just announced during the Consumer Electronics Show (CES) in January and it features some impressive specs, but we have not seen many devices adopt it yet. NVIDIA’s own Project Shield gaming system is slated to debut Tegra 4 in the second quarter of 2013, while partners Toshiba and VIZIO are also reported to be working on Tegra 4 tablets.

Sources also say that HP is currently exploring the launch of an Android-powered smartphone, but recent comments from CEO Meg Whitman indicate HP will not offer a mobile phone this year.

HP declined to comment on its plans, but the news of such a tablet shouldn’t come as a big surprise. HP has been toying with Android devices since 2010, and some might remember the mysterious TouchPads that shipped with Android installed instead of webOS. Most recently, HP has teamed up with Google and released its own Chromebook.

HP Plays Mobile Catch-Up

The move to Android could help HP regain ground in mobile computing, where so far it has lagged behind Apple, Samsung, HTC, Motorola and many others.

Over the last couple of years HP’s mobile scorecard has been a disaster. In 2010 the company spent $1.2 billion to acquire Palm and announced it would double down on webOS after Palm’s smartphones had failed to catch on with consumers. But the resulting products were massive failures and HP decided to stop making mobile devices and went on to open source webOS.

HP recently regained the top spot in the PC market by leapfrogging Lenovo, according to research firm Canalys. However, HP leads the PC market only when tablets are taken out of the equation. If tablets are counted as PCs, Apple jumps to first with 27 million units shipped in Q4 2012 and HP falls to second place with just 15 million PCs shipped.

At first glance adopting Android looks like yet another desperation move from a lumbering giant that can’t seem to figure out the new mobile erane. HP has no choice but to figure out something here. The truth is, PCs are over, and the future is all about mobile.

A Big Win For Google

It’s unclear how many mobile OSes HP will support going forward, but the news that it is going down the Android path is a significant win for Google. Android has been slowly evolving towards the desktop PC market, and HP could be the partner that helps Google turn the corner in that area.

“HP supporting Android at this point in time is deeply strategic,” said Ben Bajarin, Principal analyst covering consumer market intelligence and trends for Creative Strategies, Inc. “As any vendor who has history in the PC industry knows, it can be rough when you are completely dependent on only one OS platform provider.”

“It worked out well during the PC growth period because Windows was the standard computing platform. That is no longer the case when it comes to mobile computing where Android is the leading licensable mobile OS platform,” said Bajarin. “The reality is that if HP, or any vendor for that matter, wants to have a relevant tablet / mobile strategy, it has to include Android.”

Most of the traditional PC OEMs have already experimented with Android tablets, though several have trimmed their roadmaps after discovering there’s no money to be made in the low-end of the market. HP will face the tough challenge of releasing just another Android tablet, so it will be interesting to see what kinds of software and services the company will provide to help differentiate them from the competition.

HP is holding private meetings during the Mobile World Congress in Barcleona, Spain, later this month, and it might show off the new Android tablet there behind closed doors. But we were told not to expect an official announcement until after the show. Look for more details in the coming weeks.

Meg Whitman image courtesy of drserg / Shutterstock.com.

You know things are bad when HP is making fun of you. But that's what's happening to Dell today, after its decision to take the company private in a leveraged buyout.

HP just issued a statement warning Dell's customers that Dell "faces an extended period of uncertainty and transition that will not be good for its customers."

The statement is basically an invitation to customers to check out HP. "We believe Dell's customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity."

Carter Lusher, chief IT analyst at market researcher Ovum, put out a statement warning that Dell customers need to pay close attention to this deal. One challenge is that Dell has already been going through a "wrenching transition" from being a supplier of cheap PCs to being a vendor that can sell enterprise infrastructure equipment. 

And now comes this leveraged buyout, which will only add to the confusion. "Ovum recommends that CIOs need to assess the risk to their infrastructure and put into place plans should Dell's radical hardware, software and services shifts require changes to procurement plans," Lusher says in the statement.

HP points out that Dell will now be saddled with debt, which will make it harder for Dell to invest in creating new products. And that's true.

What Happens Next

For a good take on how the money works, check out Henry Blodget's piece on Business Insider about how deals like this usually work when a private equity fund like Silver Lake Partners take over a company.

The gist is that the private equity guys usually take some of the company's cash on hand (at Dell there's a pool of $15 billion) and pay themselves a huge dividend, enough to cover all the money they've put into the deal, so from there on out they have no risk at all. (This is why an MIT professor once famously said, "Private equity is a little bit like sex. When it's good, it's very, very good. When it's bad, it's still pretty good.")

They'll use some of the remaining cash to pay down debt. Then they'll start cutting employees and selling off parts of the business. 

Maybe it seems nasty for HP to be pointing all this out, but hey, this is business. You can be sure every HP enterprise sales person is hitting the phones hard right now. And every big Dell account must be getting lit up with phone calls from HP and others.

Larry Dignan of ZDNet calls the HP statement a "rapid-fire FUD campaign," and maybe it is. But Dignan also points out the "10 big unknowns" in the deal. And Dell's uncertainty is a huge opportunity for others.

When the world's largest PC manufacturer starts making Chromebooks, what does it mean? Does it reveal a degree of uncertainty about the direction of the PC? A response to the perceived complexity of Windows 8 machines? An underserved market it can exploit?

Why not all of the above?

Early Monday morning, Hewlett-Packard announced the Pavilion 14 Chromebook, a $329.99 netbook boasting both a larger screen - 14 inches - than rival Chromebooks, as well as a new pricing tier. HP's Pavilion 14 brings the total Chromebook count to four: the $229 Samsung Chromebook, the $199 Acer C7, the $449 Samsung Chromebook 550, and the Pavilion 14. HP's screen may be the largest of the bunch, but its processor - a dual-core Intel Celeron - sits below the Chromebook's 550's Intel Core processor.

More Of The Same

The new HP Chromebook is essentially the same as the others: it runs Google's Chrome OS, a bare-bones operating system that, on the surface, does little more than launch a Web browser. (Some games, such as the indie hit Bastion, also have been ported over to the OS.) Each of the four Chromebooks, aside from the C7, includes a 16GB solid-state drive, and connects to the Web via a Wi-Fi connection. HP said that the battery life  for its version is a disappointing 4.25 hours, rather than the 6 hours or so offered by some of the other Chromebooks.

Google has positioned the Chromebook as "companion devices," the same tack HP took as it launched the Pavilion 14. In my own use, I've found that Chromebooks and Chromeboxes are a simple, easy and effective way of accessing the Web - although a dearth of apps and a complicated approach to printing mean it can't quite compete with full-fledged PC functionality. But there's something to be said for a "PC" that boots up and resumes almost instantly, downloads patches in the background and offers a managed computing experience better than anything Apple or Microsoft offer.

A Slap To Microsoft?

Still, the fact that the largest PC maker in the world began offering a Chromebook just months after Microsoft launched Windows 8 might be seen as a slap in the face to Microsoft. And long-term, HP's Chromebook may blossom into something more. For now, though, analyst Bob O'Donnell with IDC saw the announcement as nothing more than HP dipping its toe into a new market. 

"I think they're trying to offer an even lower-cost notebook option with this and trying to stand out with a larger-size screen," O'Donnell wrote in an email. "But ultimately, I think it's testing the waters and filling out their price range."

ReadWrite reached out to both Microsoft and HP for comment, but we haven't heard back. In the meantime, a statement from HP indicates that it believes the market for Google's ChromeOS is growing.

"Google's Chrome OS is showing great appeal to a growing customer base," said Kevin Frost, vice president and general manager, Consumer PCs, Printing and Personal Systems, HP, in a statement. "With HP's Chromebook, customers can get the best of the Google experience on a full-sized laptop—all backed up by our service and brand."

HP & Chromebook: An Odd Couple When It Comes To Printing

It might be a bit odd to think of Hewlett-Packard and Chromebooks together, if only because of the awkward approach Google takes toward printing. You can't connect a USB printer directly to a Chromebook or Chromebox; instead, you either need to connect to a network-connected printer through a service called "Google Cloud Print" or use a Chrome extension to a traditional PC or notebook that is itself connected to the printer via a USB cable. (Of course, if your home doesn't have a dedicated desktop PC hooked up to a printer, the latter approach may not work so well for you.) Apparently, wirelessly connected PCs and multifunction printers are now common enough so that HP felt that there's enough of a critical mass to make this approach feasible.

But as far as the direction of the PC market is concerned, the impact of an HP Chromebook is clearly muddy. That is, no one quite knows the direction the venerable PC will take over the next few years. The conventional thinking seems to be that minicomputers gave way to desktops, desktops to notebooks, and notebooks to... where, exactly? Tablets are one answer, and HP's Windows 8 convertible notebooks fill that niche. But there may still be profits to be extracted in cheap netbooks, and Google's Chromebooks may answer that call.

Market Research?

In addition, by offering its own Chromebook, HP can gain invaluable market information. Instead of hiring IDC or Gartner to provide  sales forecasts on the expected success of the Chromebook category, HP can use the Pavilion 14 to generate real data on which way the wind is blowing. If over time we see HP announce a refreshed or additional Chromebook, we'll know that the Chromebook's sails are filling out.

Images courtesy of HP.

There's been a lot of talk about why the proposed Dell buyback doesn't add up. Some of it dates back more than two years, and the arguments all center on one thing – money. 

The problem, as critics see it, is that going private robs Dell of critical cash at the time it most needs to spend that cash to acquire companies that diversify its lineup. It's a valid point, but that doesn't mean it's the only way to look at the situation. Even with a cash crunch, pulling Dell off the public market might be exactly what the company needs to avoid prying eyes that could toast its chances for future success.

Source: Dell.com The IBM Ideal

When IBM sold its PC business to Lenovo in 2004, everybody won. IBM pulled in some needed cash, exited a low-margin business and focused on the enterprise. Lenovo got instant credibility and brought efficiencies to a market that still had years of oomph.

Nearly everyone predicts that Dell wants to do the same with its buyback, but today's market is fundamentally different. PC sales are dropping, and Dell's share of that market is falling even faster. Plenty of PC manufacturers would be willing to fold Dell's brand into their lineup, but not at the premium investors would ask. Time isn't on Dell's side. The longer it waits to offload its PC business, the worse the deal will get. Going private would at least shield the company from having to make those details pubic.

The HP Boondoggle

Dell is smaller and more dependent on PCs than is HP, but the two companies line up well enough to illustrate how  a reinvention of Dell might work. 

HP is an absolute wreck. Investors are shaky, key executives are fleeing, and even Meg Whitman's rosiest turnaround scenario offers years of bleeding to come. HP has product problems, legal problems and PR problems, and it's headed for a fire sale. Seven out of the ten first-page results on a Google News search for "HP" were negative. HP is floundering in full view, and all the negativity is making it difficult for the company to manuever. 

So why didn't HP go private?

According to Gartner Senior Research Analyst Chris Gaun, "HP has a larger market capitalization, and going private might not have been an option." Raising $15 billion for a Dell buyout is pushing the envelope. $34 billion for HP would be in a completely different zip code. Gaun also points out other complications, such as the Autonomy investigation, which would add substantial risk and complexity to any buyout. HP is too big and too messy for a buyback.

HP CEO Meg Whitman claims low-margin PCs are essential to HP's survival as a full-spectrum technology provider. Lets' say Dell agrees. Going private still makes sense. 

According to Reticle Research Principal Analyst Ross Rubin, a buyback could benefit Dell, regardless of its goal. "Going private would insulate Dell from investor scrutiny and the expenses of running a public company. It would have more flexibility to continue the low-margin PC business if, like HP, it continued to see it as part of a solution - or spin it out and take the revenue hit, as HP was considering."

Source: Shutterstock Protecting The Brand

Even the high-margin products and services Dell wants to protect are being pushed toward commodity status. In the end, Dell will be trading on its name. Insulating that name from controversy that might cheapen it could be worth some belt-tightening.

Michael Dell photo from Dell. 

Having slogged through so much bad news of late, last week Hewlett-Packard marketers were quick to run to their laptops to make hay out of a closely watched market report showing that HP remained the word's top-selling PC maker. But in their rush to shine a positive light on their struggling employer, the PR folks left out the most important point: HP is fighting to stay king of an eroding hill.

For HP, Flat Is The New Up

International Data Corp. (IDC) found that HP's fourth quarter PC shipments last year remained roughly flat from the year before. But that was enough to keep it at the top with almost 17% of the market. Soon after the scrap of good news hit the Web, HP public relations went to work. "We believe HP's position as the market share leader demonstrates out ongoing commitment to deliver superior PC products and experiences across customer segments," the press release said.

Woo-hoo!

Ironically, in tooting its own horn, HP highlighted its biggest problem, which is its need to cling to dwindling markets. The IDC report found that global PC shipments fell more than 6% in the quarter and more than 3% for the year. It was the first time in more than five years the PC industry had recorded a year-on-year drop during the holiday season, according to IDC.

The reasons behind the decline are well known. People increasingly favor smartphones and tablets, both fast-growing markets where HP remains a non-player. Heck, even Microsoft, which helped to usher in the PC era, sees its demise and is pushing tablets and smartphones as the future of computing.

But for HP, staying flat in PCs was so exciting it had to churn out a press release. That's not a good sign. But given what else is going on at the company, the temptation is understandable.

Due to management bungling over the last few years, HP has fallen ever farther behind its rivals in taking advantage of game-changing trends in the consumer and enterprise markets. The company paid a total of $24 billion for Autonomy and EDS to become a player in big data software and IT services, respectively, only to see both deals go down in flames through huge write offs.

HP Battles Workers

Meanwhile, HP is chasing distractions when its focus should be on innovation. In Texas, HP is in a tussle with customer General Motors, which is in the process of giving HP services the boot. Eighteen employees quit HP at the same time and without notice to join GM's efforts to take its IT work in-house.

HP is asking the state court for permission to depose two of the workers; a move GM has called "retaliatory" and a "fishing expedition," according to Bloomberg. It seems HP can't understand why anyone would want to flee a company that has promised Wall Street that it will fire 29,000 employees this year and next.

Bright Spots

HP's current state is not all dark. Last week the company launched a services center for in-memory computing, an emerging technology that significantly boosts application performance by keeping all data in system memory rather than on disks. The announcement came the same day SAP said it was making all its business applications available on its in-memory database called HANA. HP plans to throw its support behind HANA and is also working on its own in-memory platform, codenamed Project Kraken," according to InfoWorld.

Kraken-like initiatives are what HP's PR team should be crowing about, rather than the company's managing not to shrink in the cratering PC market. Chasing hot new markets - not scrambling to be the last PC vendor to avoid extinction - is the only way to change HP's image as a dinosaur.

Dinosaur image courtesy of Shutterstock.

This week's super-duper Consumer Electronics Show (CES) announcements that companies like Hewlett-Packard, Lenovo and others are rolling out a bunch of new laptops, desktops and monitors seems to have caused some surprise in the technology world. After all, the world is all about tablets now, so why would any company devote precious resources to developing such archaic technology?

Well, what the heck else were they going going to do? Billions of dollars of infrastructure is invested in manufacturing PCs, so it's not like the company was going to turn around overnight and say "Oh, well, that was a mistake, let's make tablets and nothing but tablets from now on."

And it's not like Lenovo is ignoring the whole concept of alternative computing platforms. The China-based hardware maker also pushed out a line of Android phones and a big-ass "Table PCs" that just barely avoids the raging failure of the original Microsoft Surface by (a) not costing a gazillion dollars and (b) not requiring the help of a furniture mover to be repositioned. HP is busy with its convertible tablets. And that's the story with pretty much ever hardware vendor you can name.

Still, it may seem weird that hardware vendors are putting in a lot of marketing and sales into "traditional" PC form factors when all the hype is about mobile and tablets.

Workers & Creators Unite!

But it's not so weird when you take two very important facts into consideration:

1. People still need to get work done
2. Right now the best software for productivity is geared towards the PC form factor. And that's true even of Web-based applications.

It's not that you can't get work done on a tablet. I write on my iPad all of the time and I've gotten to the point that I will haul it around instead of a full laptop when attending various events. But I always use a TouchFire keyboard overlay or an external Bluetooth keyboard with my iPad - anything to avoid typing directly on a glass screen.

And I always still bring my laptop along when I travel. Because even though I can (and will) write a complete article on the tablet, using most Web-based content management tools requires a keyboard and mouse/touchpad interface.

PCs Still Rule For Productivity

More generally, that's still the preferred interface for most business applications, not just website back ends. Using Google Docs (especially the spreadsheet) is painful on a tablet's browser, and unless it were heavily modified, I could not imagine using an application like GIMP long-term on a tablet (although I have done it done so in a pinch using remote desktop software).

Sure, there are tablet-specific alternatives for increasing numbers of common business applications, and many custom business apps are now going mobile as well. But many other apps still don't have mobile equivalents, and even when mobile versions do exist, they're not always as full-featured and easy to use as the original PC versions.

All the hardware vendors are well-aware that there are two kinds of computer users out there: those who consume and those who produce. Most "consuming" users can get by with tablets, smartphones and touchscreens. Many producers, on the other hand, still find such form factors limiting at best.

They may not be the meat of the computing market going forward, but they're never going away completely. Heck, someone has to get some work done, right? Hence, the continued investment in PC devices.

For my part, I hope new and better PCs keep on coming. if Lenovo and HP and everyone else (including Apple) ever abandon those who create in favor of those who consume, productivity would decline and make us all poorer.

As a teacher, I worry that my students are increasingly ill-prepared for business computing work because their parents are buying them the latest tablet or smartphone instead of something they can actually work on. As a father, I may lend my kids a tablet for fast research or messaging, but to write reports or build presentations, the PC is still the best way to go.

Image courtesy of Lenovo.

While Hewlett-Packard says it "continues to evaluate" the sale of underperforming businesses, the company's cash flow problem will make the shedding of assets unavoidable. So what's likely to head to the auction block? Everything from notebooks and desktop PCs to Itanium servers and tape drives that have been draining assets could be on the market.

A Breakup Alternative

For Chief Executive Meg Whitman, selling off pieces of the crippled tech giant would be a much better alternative to breaking up the company. Whitman has opposed the latter option, starting with her decision in 2011 to nix a proposal by her predecessor, Leo Apotheker, to spin off the company's personal computer unit.

Since then, Whitman has ignored Wall Street analysts who say shareholders would be better off if the company spun off the division that sells PCs and printers from the one that sells software, hardware and services to companies.

As a less dramatic alternative, getting rid of businesses draining the company's limited resources, would help HP make better use of limited cash. In fiscal 2012, HP's free cash flow dropped to $6.9 billion from $8.1 billion the previous fiscal year, according to The Wall Street Journal. That's a trend that could spell trouble if not stopped. Without cash, a company will find it difficult to develop new products, make acquisitions, pay dividends and reduce debt.

Getting rid of underperforming businesses is one way to improve cash flow and avoid splitting the company. "Everybody zeroes in on printers and PCs as the things they should potentially sell, and quite frankly, there's not really a logical buyer for either of those businesses," Crawford Del Prete, analyst for International Data Corp., said. "And, those businesses generate a significant amount of cash, which Hewlett-Packard needs right now."

HP-UX And More Must Go

A more logical sale would be the Itanium server business. HP has spent a lot of money trying to drive sales of its HP-UX Unix server that runs on that chip architecture, while the business continues to shrink. In 2010, Microsoft said it would drop support for Itanium and Oracle said a year later it wants to do the same.

Another candidate for jettisoning is HP's low-end IT outsourcing business, which was included in the 2008 acquisition of Electronic Data Systems. Earnings from the services business has been falling, and last August, HP said it would write off $8 billion in goodwill from the EDS purchase.

Last year, General Motors, a major HP customer, said it would move away from outsourcing IT and take some work in-house. The announcement made industry observers wonder whether HP can handle those large-scale deals, Del Prete said.

Within HP's Personal Systems Group that makes PCs, workstations, tablets and printers, the company could sell the low-performing notebook and desktop PC businesses, which have been trumped in the market by tablets.

The low-end printer business that primarily serves consumers and small businesses could also be sold. However, printers are still used in emerging markets, so HP would be just as likely to hold off to see how profitable those markets become. "HP has a plan to drive those businesses, so I'd be surprised to see them get out," Del Prete said.

Finally, tape drives used for long-term data storage is a candidate within the company's enterprise servers, storage and networking division. Such a low-margin business would be best left to IBM and others with larger stakes in the market.

HP likely has other losers within its product lines that it would be better off without. Whitman should act quickly to get rid of the chaff and focus resources only on the profit generators.

Image courtesy of Shutterstock.

Hewlett-Packard has made if official. The Justice Department is indeed investigating HP's allegations that Autonomy execs tricked the troubled technology giant into paying way too much for the British software maker. In disclosing the probe in its annual regulatory filing with the Securities and Exchange Commission, HP has started the next chapter in its ongoing feud with Autonomy founder Mike Lynch - who denies duping HP.

Probe Expected

The probe was expected, given that HP announced last month it had proof that it had been conned in last year's $10.3 billion acquisition-turned-fiasco. At the time, HP said it had turned over the evidence to the Justice Department, the SEC and the U.K. Serious Fraud Office. "On November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy," the company reported to the SEC Thursday.

HP claims Autonomy executives inflated the company's value by reporting some revenue prematurely or improperly. The alleged bogus reporting accounts for almost 60%  of the $8.8 billion write down HP booked last month on the Autonomy deal.

Ex-Autonomy Chief Executive Lynch responded to the investigation Friday by continuing to deny any wrongdoing. On a website Lynch set up to counter HP's allegations, he reiterated his complaint that HP has yet to release any details of the alleged scam. "Simply put, these allegations are false, and in the absence of further detail we cannot understand what HP believes to be the basis for them," Lynch wrote.

Details Still Hidden

HP is still keeping the details of the allegations confidential among itself, prosecutors and regulators. Thursday's filing did not provide any new details. Nevertheless, Lynch is ready to tell his side of the story. "We will co-operate with any investigation and look forward to the opportunity to explain our position," he wrote.

Throughout the claims and counterclaims, HP stock continues to get hammered. From the beginning of 2012 to Thursday, the price has fallen 45%.

Officially, the Federal Bureau of Investigation won't discuss whether or not it is involved in the case. However, an unidentified source told Bloomberg that the agency is assisting the SEC in its investigation.

While Autonomy execs are under the investigatory microscope, shareholders are blaming HP for the deal that ended up wasting billions of dollars. In the SEC filing, HP lists 10 lawsuits, including four class-action suits.

Apotheker Still Blamed

HP CEO Leo Apotheker, who was fired in September 2011, led the Autonomy deal as part of a plan to get HP deeper into the high-margin enterprise software business, while reducing its dependence on selling low-margin PCs. Autonomy software searches, organizes and manages data within large companies.

Apotheker sealed the end of his short career with HP when he announced he was considering the sale of its PC business. Because he had no buyer, Apotheker's disclosure sent Wall Street analysts into a tizzy. To them, Apotheker appeared to lack a clear vision or roadmap for saving HP from its years of bad deals, management turmoil and strategic blunders.

Current HP CEO Meg Whitman was on the company's board when it signed off on the Autonomy deal. Nevertheless, she has distanced herself and other board members from the debacle by laying the blame on Apotheker and then mergers and acquisitions head Shane Robinson, who also left the company in 2011.

History aside, now that federal prosecutors are officially involved, the repetitive claims and counterclaims being tossed back and forth between HP and Lynch won't matter much. The companies, their customers and shareholders now have to hope for clarity in the courts, especially if charges are filed.

Image courtesy of drserg / Shutterstock.

Settling the latest shareholder suit from Hewlett-Packard's Autonomy debacle should be easy. All HP has to do is show that it has actually built some marketable software out of the $10.3 billion acquisition. The question is, where is that software?

Stanley Morrical isn't convinced such software exists, so last week he sued HP in Federal court in San Jose, CA, accusing the company of fraud. Morrical is not buying HP's claims that Autonomy executives duped it into buying the British software maker last year through "serious accounting improprieties, misrepresentation and disclosure failures." HP has asked US and British regulators to investigate for criminality.

HP's Alleged Cover Up

HP says it will take an $8.8 billion write off from the purchase of Autonomy, most of it due to paying too much for Autonomy because of alleged shenanigans with Autonomy's accounting prior to HP's acquisition of the UK company. But Morrical says all of these allegations are covering up HP's incompetence in failing to upgrade Autonomy's software and release it as a sellable product.

“In an effort to conceal their own gross mismanagement, fraudulent conduct and potential exposure to securities claims, HP’s officers and directors have blamed the entirety of the $8.8 billion write-down on accounting issues," Morrical's lawsuit says.

HP did not respond to a request for comment.

The suit's allegations stem from HP's announcement in November 2011 that IDOL 10, a major upgrade of Autonomy's IDOL 7, was ready. In general, IDOL software searches, organizes and manages all data within an enterprise. The upgrade included integration with HP's data analytics application, acquired that same year with the purchase of Vertica.

Where's IDOL 10?

While claiming to have IDOL 10 ready, HP actually had nothing to sell, Morrical is accusing. Essentially, he claims, IDOL 10 was vaporware.

"You go out in the market and say it's available and it's not," Aron Liang, an associate at the San Francisco law firm Cotchett Pitre & McCarthy, which is representing Morrical, said. "So either they knew it and they're lying or they don't even know what they're selling, which in some ways may even be worse."

David Schubmehl, a tech analyst for International Data Group, said he was briefed on IDOL 10 in June. However, Schubmehl says he hasn't talked to any companies using the software.

"I can't confirm that anyone is actually using IDOL 10," Schubmehl said. "However, I have had briefings about that back in June and it certainly seemed to be part of their big data offerings."

In an interview with the San Jose Mercury News, an HP spokesman declined to comment on the status of IDOL 10.

The suit also accuses HP's leadership of corporate waste and failing to meet their legal obligation to act in the best interest of shareholders.

Buying Autonomy

HP made the accounting allegations against Autonomy in November of this year, roughly a year after agreeing to buy the software maker. Other tech companies and industry experts have said Autonomy was overpriced.

The deal was brokered by HP's then-CEO Leo Apotheker, who was ousted months later and replaced with ex-eBay Chief Executive Meg Whitman.

Whitman, who was on the HP board when the Autonomy deal was approved, takes no responsibility for the purchase and believes HP shouldn't either. But shareholders aren't buying it. Others who have filed suits over Autonomy claim they are the real victims and they want their day in court.

In the case of Morrical, he also wants to see some real software come out of the deal. If HP has it, then the company shouldn't have any trouble showing him.

Image courtesy of Shutterstock.

We tend not to think about storage - until we don't have enough. We carelessly store documents, emails, images, video, and massive amounts of all kinds data only to wonder why there never seems to be enough places to put our company's stuff. But as new technologies combine to provide storage over the Internet, easing fears of limited capacity and the promise of virtualized architectures are helping shape the next phase of the Internet.

Storage Isn't Sexy, But...

Virtual storage is neither as flashy nor as sexy as virtualized servers. Historically, enterprises set up a storage device, backed up data and content in regular intervals and forgot about it. But because hard drives offer limited capacity, it has become necessary to manage multiple storage strategies. Additionally, archiving digital content traditionally meant burning to a disc or transferring data to magnetic tape. The archived data and content was not readily accessible.

As cloud computing has emerged as a basic networking practice, more and more content is stored in virtualized, interconnected storage devices. Not only does this make it possible to access massive files online in an instant, it also makes storage more affordable, efficient and easier to manage.

By abstracting how storage functions from a set of individual physical hard drives to logical storage (or partitions) spread across any number of physical drives, storage can be made less expensive and much more flexible. With virtualized storage accessible in a cloud computing environment, companies and even individuals can now add as much storage space as they need, pretty much on demand. 

Hardware vs. Management

For consumers, this means devices like smartphones and tablets do not require massive storage drives. For enterprises, virtualized storage means spending less on hardware and more on efficiently managing data and content. The trend meant companies can protect their remote office data and remove the need for multiple storage networks. Virtualizing storage also helps with disaster recovery by spreading the information to remote locations and providing multiple copies of data. The trend is toward continued efforts to make cloud-based virtual storage even more efficient and less expensive. Some enterprising companies have already managed their cloud architectures with multiple storage technologies so well that they've adapted their own capabilities to deliver Storage as a Service to other companies.

There's still potential for further migration toward virtualized storage. Forecasts for the global cloud virtualization software market (currently estimated at $6.7 billion) between 2011 and 2015 show a year-over-year growth rate of 14.98%. Virtual machine and cloud system software represents the fastest growing segment, with research firm IDC pegging growth at 17.8% in the first half of 2012.

Investments in cloud-based storage also suggest future growth. Venture funding for storage companies totaled $458 million through the first three quarters of 2011, according to analysis from Strategic Advisory Services International. That is 42.4% more than the $321.5 million storage startups received in the same time a year before. Storage mergers and acquisitions are also on the rise with 23 deals adding up to $8.7 billion through the first three quarters of 2011.

Benefits Of Virtualized Storage

Outside of the obvious benefits of being able to access content from multiple locations on multiple devices, virtualized storage also allows for information sharing between large numbers of people. While it's still a relatively new technology trend, storage virtualization isn't hype. "But it's all about the use cases," says John McArthur, president of Walden Technology Partners and a board advisor at Starboard Storage Systems. "The use cases will evolve and mature over time, just as they are with server virtualization."

McArthur points to making storage asset management less of a problem, where the goal is migrating data from one device to another without having to physically link them together. Other benefits include replicating data between locations, making point-in-time copies of data, expanding storage capacity, and shrinking storage costs. Additionally, virtualized storage allows for a "pay as you go" subscription model that can increase storage capacities as needed, without having to grow data center footprints.

"Some companies will embed storage virtualization in an appliance to make their appliance simpler to manage and control," McArthur said. For example, hedge fund Thames River Capital virtualized its storage area network and saw a 40% improvement in the performance of its virtual machines as a result.

Virtualization Meets The Cloud

As the technology improves and devices continue to be connected to each other, cloud computing will increasingly merge with virtualized storage. One consideration is using cloud versus physical storage for high-performance computing at scientific research centers, according to John Bates, co-founder and CTO at TwinStrata.

"Cloud storage can solve some of the problems associated with big data, particularly in the areas of resource planning and infrastructure growth costs," Bates told industry reporters. "Cloud storage offers massive and automatic scalability, without requiring heavy capital expenditures on fixed storage systems that may reach capacity too fast."

The Internet Of Things, And More

Another use case for cloud-based virtualized storage is enabling a wide variety of non-computing devices connected to the network, also known as the "Internet of Things." In its estimates for 2020, IDC believes approximately 30 billion devices will be connected, each requiring cost-effective use of software and storage for the information gathered.

Considering the capabilities being developed for the next phase of the Internet, it's not much of a stretch to think that virtualized storage could be used to recreate virtual versions of specific events at specific points in time. A wide array of networked storage devices would hold the information from computers, sensors, cameras and other information sources to quickly recreate almost any event or scenario.

Perhaps the holographic event simulator (the "holodeck") from Star Trek might someday be a reality.

Storage has always been important to the enterprise - but the rise of big data applications puts unprecedented pressure on storage strategies and technologies. It's also delivering unprecedented benefits to the companies that figure out how to do it right.

So how big is big data? Approximately 2.5 quintillion bytes of data being created every day - 90% of it unstructured, according to IBM's estimates. Given that data can be in the form of customer sales interactions, corporate logistics information, or communications with partners and suppliers, companies are faced with tough choices. Data centers full of standard 2TB hard drives were not designed to handle big data.

What is needed is a combination of robust storage hardware and software that allow for quick access to relevant information.

Some Need Storage More Than Others

While big data and the information storage needed for analyzing and containing giant data sets are common amongst mid- to large-scale enterprises, some need big data storage solutions more than others. Earth scientists, engineering modeling, media and entertainment, and rapidly growing online services all contribute to the massive amounts of data being generated. The U.S. Library of Congress, for example, had 235TB of storage in April 2011. For this information to be analyzed, it must be stored properly for instant access.

"Whether it is storage systems architectures or storage devices enabling big data applications, the growth of content is increasing the amount of large data sets that enterprises must work with," wrote Tom Coughlin, president of Coughlin Associates, a storage analyst and consultancy, in a recent blog post. "These big data applications require managing, protecting and analyzing large and complex data content."

Analysts with McKinsey and Co. estimate nearly all sectors in the U.S. economy had an average of at least 200TB of stored data per company with more than 1,000 employees. That's twice the size of U.S. retailer Wal-Mart’s data warehouse in 1999. Many sectors had more than a petabyte in mean stored data per company. European companies have also amassed a massive storage capacity (almost 11 exabytes). That's 70% of the computer storage space created in the U.S. (more than 16 exabytes) in 2010.

But storing this information for data analysis can prove pricey, prompting enterprises to look for innovative ways to consolidate data sets and reconfigure connections between big data applications.

Overcoming Cost Constraints

While data warehouses cost tens or hundreds of millions of dollars to start with, the cost of storage can increase astronomically from there whenused for big data projects.

The average cost of a supported Hadoop distribution costs about $4,000 per node annually. A Hadoop cluster requires between 125 and 250 nodes and costs about $1 million, according to John Bantleman, CEO of big-data database developer RainStor. And companies like Yahoo have 200PB data sets spread across 50,000 network nodes!

"We know one thing is proven: The benefits of leveraging Big Data will outweigh IT investment," Bantleman wrote in a blog. "Cost by how much is the question."

Bantleman suggests there are two key areas that will continue decreasing the cost of big data storage:

1. Re-using existing SQL query language and existing business intelligence tools against data within Hadoop.
2. Compressing data at its most basic level, which not only reduces storage requirements, but drives down the number of nodes and simplify the infrastructure

Another factor affecting cost and complexity centers on where these storage arrays are physically located. New technologies are bringing some storage and storage functionality back much closer to the server and moving some further away in cloud storage. Increasingly, storage functions will be distributed inside and outside of the data center, in internal and external clouds.

More importantly, storage will be a key enabler of new business process and business intelligence applications that will be able to digest and present orders of magnitude more data than current applications, says Wikibon.com CTO David Floyer.

Storage-as-a-Service Meets Big-Data-as-a-Service

The economics of data movement are tipping the scales towards distributed compute services. Processing the data where it is sitting will be the model for the next generation of platforms. The infrastructure for this is falling into place.

As big data transforms from traditional closed data collection and analysis, companies are increasingly considering the benefits of cloud-based services. Online applications and services now create new sources for expanding data that create new challenges for fast access and fast use of information. Big data therefore results in big storage and big business opportunities.

While storage housed on-premise provides a controlled advantage for some storage systems dedicated to big data analytics, the more logical extension would be the expansion of online storage services for big data analytics. The concept of Big-Data-as-a-Service (BDaaS) is expected to debut in the Asia Pacific region in 2013, according to analysts with research firm IDC.

"We have seen cloud services, hosted data centers, service providers, and system integrators all expanding their XaaS offerings," Craig Stires, research director for big data and analytics, IDC Asia/Pacific predicted in his 2013 outlook. "The implementation and execution of a provisioned BDaaS solution will leverage platform, networking, storage, and compute services. IDC expects to see a breakthrough BDaaS offering in 2013, which will leverage all of these assets, as well as solve the challenge of how customers will on-board their data."

Whether in the cloud or in the data center, companies will look for ways to effectively cut costs without having to reduce the amount of information they work with. IT departments will be faced with the challenge of how to integrate these new sources of data within existing well-structured data management systems.

Organizations have invested considerable time in agreeing on what data is to be included into traditional analytical data storage, how it is to be defined, ownership, and permissions. The inclusion of new sources of data, streaming in at high speeds, with potentially large issues around data quality, will be a massive challenge. Finding the most efficent way to store this data will competitive advantages to organizations that do it right.

Lead image courtesy of Shutterstock.

With the emergence of Windows 8, hardware makers have redoubled their search for the right combination of full-featured laptop and super-portable tablet.

Hewlett-Packard -- like several other manufacturers -- is betting on business laptops that swivel, twist and gyrate to become a reasonable facsimile of a tablet. HP's candidate, the Elitebook Revolve, was announced Wednesday.

In contrast, Microsoft's answer, the upcoming Surface Pro tablet, uses an add-on keyboard cover to help it keep up with laptops. 

It's not clear which approach buyers want, or if they want hybrid devices in the first place. Apple, which created the successful tablet market with the iPad, seems to think that tablets are more like giant smartphones, not slimmed down laptops. And unlike Microsoft, which built Windows 8 to work on both tablets and laptops, Apple uses one operating system for laptops and desktops and another for tablets and smartphones.

It's All About The Hardware

In many ways, it's up to the hardware to determine which approach will work best, so I was happy to spend a few minutes with the Elitebook Revolve.

According to Ajay Gupta, HP's director of commercial notebook products (right), the Revolve is a notebook first, designed to be a knowledge worker's primary computer. It includes just about all the features required in standard notebooks, and works with HP notebook docking stations.

Here are the specs, per HP:

• 11.6-inch, 1366 x 768 Gorilla Glass touchscreen
• Intel Core i3, i5 or i7 processors
• Up to 256GB SSD storage
• All-magnesium chassis, 8.35 inches x 11.22 inches x .8 inch
• About 3 pounds
• Full-sized, backlit, spill-resistant keyboard with bottom-case drain
• Trackpad
• 720P camera
• Optional 4G LTE broadband connectivity
• MicroSD slot, Micro-SIM
• Two USB 3 and DisplayPort, Wi-Fi and near-field-communication connections
• Eight- to 10-hour battery, 210 hours of standby
• Optional pen, with clip
• Fully serviceable drive bays 
• HP enterprise management software

Pivot And Fold

But the specs don't tell the story of the Revolve. The device's entire reason for being is the way the touchscreen pivots and folds, from a normal laptop position, to lay flat over the keyboard, creating a tablet (though one twice as heavy as an iPad). Even cooler, you can stop the transformation half-way, leaving the screen pointed away from the keyboard to get a small presentation device.

It's a pretty slick system, and in the few minutes I got to play with it, the hinges and magnetic clasps worked well and had a reassuring solidity.

Encouraging And Exciting

Personally, I find these new forms arriving in the wake of Windows 8 encouraging and exciting. They'y represent continued innovation, and will hopefully lead to even more-useful designs. The new devices are exciting, because they're new and untested. We don't know how well they will work or whether they will solve problems.

Heck, we're still trying to figure out what those problems might be much less whether they're best addressed with the Revolve or Surface Pro (or, for that matter, hybrids like the Dell XPS 12, Sony Vaio Duo 11 or Lenovo IdeapPad Yoga). Or maybe the need for true Windows compatibility is overblown, and the lighter iPad or Android tablet will do just fine.

In the meantime, I'm thrilled just to see innovative new designs like the Revolve.

I'd be even more thrilled if HP would give some hint about how much its devices will cost when they appear in March.

Top and bottom images courtesy of HP. Other images by Fredric Paul.

The question of whether Hewlett-Packard can avoid a break-up will be answered over the next six months. That's how long the company has to convince investors its PC, printer and technology-services businesses can generate the cash needed to build and sell products into growth markets, especially mobile and cloud computing.

Sharks have been circling HP for a while now (see June's ReadWrite DeathWatch: Hewlett-Packard and October's Why Meg Whitman's Plan To Rescue HP Won't Work), but the turnaround window shrank considerably Tuesday when HP claimed that it had been duped into paying $10.3 billion in 2011 for British software maker Autonomy. That led HP to garnish its fourth-quarter earnings with a whopping and disastrous $8.8 billion charge for the acquisition, with $5 billion directly related to accounting improprieties allegedly committed by Autonomy execs.

Not surprisingly, the disclosure rattled investors who sent HP shares plunging to a 10-year low. HP's $6.85 billion net loss for the quarter ended Oct. 31 followed an $8.9 billion loss in the previous quarter. That loss, too, was primarily due to a huge write-down on a major acquistion, in that case the $9.2 billion spent in 2008 to buy tech services provider EDS.

Leo Apotheker To be fair, chief executive Meg Whitman inherited Autonomy and EDS from her predecessors, ousted CEOs Leo Apotheker and Mark Hurd, respectively. Nevertheless, she's being paid millions to clean up the mess, and so far, for every step forward, the company has taken two steps back.

Why Autonomy Is So Damaging

The Autonomy deal is especially troubling because it makes investors and analysts -- not to mention customers, the media and just about everyone else -- wonder how many more giant blunders are on the way. If in fact Autonomy executives are guilty of accounting malfeasance, as Whitman claims and Autonmy execs and Apotheker strongly deny, just how did HP execs get hoodwinked? And how can we be sure it won't happen again?

Blaming others won't ease the doubts about the competency of HP execs and its board. And without confidence in management, corporate customers are unlikely to bet big on HP. If that doesn't happen, HP can't generate the cash it needs to expand into growing and emerging markets.

"If they can't do that (increase sales), then there's going to be massive pressure for them to split the company up," warned Crawford Del Prete, an analyst for IDC. "Otherwise, the perception would be they're just going to atrophy," he said. "Those assets are going to become less and less and less valuable."

Unless Whitman can demonstrate -- soon -- that a turnaround is inevitable, investors will agitate for a breakup sooner than later, in order to get the highest returns on the pieces. The Autonomy setback gives Whitman less time to do that. Starting right now, she has to nail every move to stabilize the company and show steady progress.

Market Hurdles

Under even favorable conditions, boosting sales would be difficult. A quarter of HP's revenue comes from PCs, and that market is taking a drubbing as people adopt smartphones and tablets. The PC market is expected to shrink 1.2%, to 348.7 million units, this year, according to IHS iSuppli. The decline is the first since 2001.

Worse, HP does not yet have a competitive smartphone or tablet. Whitman says a smartphone is coming, and the company is scheduled to release a business tablet, called the ElitePad, in January.

Then there's the printer business, a major revenue stream for HP. Once again, the company will have to find a way to increase business in a contracting market as people forego expensive printers and ink for digital media.

HP Still Has Hope

HP is not without competitive products, however. In the high-margin enterprise market, for example, the company has competitive data-center hardware and software.

"There's many product lines that Hewlett-Packard has that are world-class competitive and other product lines that can be world-class competitive," Del Prete said.

Whitman isn't sitting still through all of this. She is cutting 29,000 jobs by the end of fiscal year 2014 to reduce costs by as much as $3.5 billion. Whitman is also streamlining the printer portfolio and overhauling HP's technology-services business.

If you set aside the Autonomy disaster, HP's overall results were mixed. The company's fourth quarter profit excluding the write-down and other items was $1.16 a share, besting the average of analysts' estimates of $1.14. Revenue was $30 billion, just below analysts' projections of $30.4 billion.

While those numbers are nothing to celebrate, they are the base line that HP must build upon if it hopes to stay in one piece. Oh, and must avoid any more Autonomy-style surprises. The iconic Silicon Valley pioneer simply won't be able to survive any more shocks like that.

Images courtesy of Shutterstock.

A year after Hewlett-Packard's head-scratching acquisition of semantic-search company Autonomy for $10.3 billion, the move seems to have blown up in HP's face. HP is admitting today "serious accounting improprieties" by Autonomy.

Serious indeed. HP's fourth-quarter earnings will reflect an $8.8 billion write-down related to the improprieties. Overall, HP is reporting a 4Q loss of $6.9 billion, a bad skid for a company that seems more out of control every day.

When the deal was initially brokered by HP's then-CEO Léo Apotheker in August 2011, there were a lot of "what the hell?" comments flying around. HP had just bought a UK business that did not seem to fit HP's business model.

Questions Raised

Recall the context of the announcement, too: HP had just shut down TouchPad and webOS development and its printer supply chain was reeling from the Japan tsunami. Having put so much effort into webOS and then dumping it when it failed to rocket out of the gate, HP seemed to be throwing away its mobile strategy only to buy a data company, for an amount equivalent to 11 times Autonomy's revenue levels (which, if HP's accusations are true, were greatly overestimated).

Bluefin Solutions Ltd.'s head of Business Analytics & Technology John Appleby called the decision "bizarre" at the time. "It's a stand-alone software company that does niche database-search products and sells to some big customers. Great, it will diversify HP's software business, but I don't see the attraction of such a niche," Appleby wrote.

Our own Scott Fulton was a bit more sanguine about the acquisition.

"This is what Hewlett-Packard announced yesterday that it intends to do: acquire a software firm whose core product aims to supplant everything we know about databases, both the SQL kind and the Google kind. In its place would come a clustered approach whose goal is no less than to be the central repository for meaning in the world," Fulton penned.

What Fulton, and several other analysts came around to, was the position that HP's acquisition was a shift to get into search and possibly content management, trying to capture a piece of the already-exploding data marketplace. Apotheker and later CEO Meg Whitman were trying to dive in outcompete SAP and Radian6, among others.

Damage Done

To be fair, no one then suspected the company might have cooked its books. 

Now we may never know what will come from HP's Autonomy gamble, because HP is now leveling charges that the dice were rigged to lose the whole time.

"HP is extremely disappointed to find that some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy's acquisition by HP," the company said in a statement. HP execs say the firm is consulting with U.S. and U.K. government officials and plans civil actions as well.

At deadline, HP shares were down 11.8% to $11.73. HP's opening price on the New York Stock Exchange was 12.5% lower than its Monday closing price.

The ramifications will go beyond HP share prices. Since the tenure of Apotheker, the company's direction and mission seems clouded in a haze of missteps and false starts. There's only so far that a legacy will get you, and HP seems to have overspent its venerable status.

Image courtesy of Darren Brode / Shutterstock.

If this is the dawn of the “post-PC era,” then the economy never got the memo. While the tablet segment is finally growing (thank you, Apple), the five-times-larger PC segment is actually growing faster in terms of units, and will continue to do so for the foreseeable future.

Industry analysis firm IDC predicts worldwide growth in tablet shipments from 2013 to 2016 to be about 32 million units per year. In the same period, the rate of PC shipment growth will be about 38 million units per year. 

For 2013, IDC predicts Windows 8-based tablets will constitute merely 6% of units shipped worldwide. This means, despite all this business about the new Start Screen bridging the functionality gap across platforms, Windows 8 isn’t really about tablets. It’s about injecting PCs with the desirability of tablets. 

Avoiding The Commodity Trap

While the PC market is not dying, PCs themselves must evolve more quickly into something more desirable, more functional, more adaptable to the purposes of consumers in this decade. Otherwise they will continue their slide into low-margin commodity products - largely indistinguishable from each other. PC vendors desperately need the next waves of their product lines to be significantly, tangibly different from their predecessors, in order to justify increasing their prices and profit margins.

This is why Windows 8 looks so different. While reviewers have raised a ruckus about Microsoft designing the new Start Screen to take over the entire display, making Windows 8 more difficult to use even for veterans, there is a reason why Microsoft did this: For a Windows 8 PC to justify a price point above that of the iPad, it has to look demonstrably different from a Windows 7 PC. You couldn’t photograph a Windows 7 machine, put it in a sales brochure, and have it look different from a Windows Vista computer. But you can see Windows 8 from the opposite end of the mall.

In 2006, vendors wanted Vista to be demonstrably different from Windows XP. Microsoft tried to demonstrate this difference with aesthetic nuances like translucent window frames and 3D task switching, and then tried to divide PCs into categories based on how well they supported these nuances. Consumers were rightly confused, and some even sued.

To avoid a repeat of the 2006 debacle, Microsoft had to make Windows 8 not only look entirely different, but enable new PCs to acquire some of the more desirable characteristics of tablets. That's why this next wave of PCs will promote noteworthy differences in two key areas:

1. Touchscreens

The relative success of touchscreens on PCs will be more important for Windows 8 than its comparable success on tablets.  

Up until now, most consumers looked for middle-tier laptop machines that provided good processing power and nice features, at price points around $900. The first middle-tier Win8 notebooks with touchscreens are  priced around $1,200. Acer’s new Aspire S7-191 has an 11.6-inch screen with 16:9 aspect ratio and respectable 1920 x 1080 resolution (“true HD”).  It’s based on Intel’s third-generation Core i5-3317U processor, has 128GB of solid state storage and 4GB of RAM, weighs about two-and-a-quarter pounds, and sells for $1,199.99.

Dell’s new XPS 12 also has true HD resolution, a 12.5-inch screen, and sells for $1,199.99 (one senses a theme).

The XPS 12 uses the same Core i5 processor, has the same storage capacity, and the same memory.  Dell’s value-add will be style, which has not always been its strong suit. Though the XPS 12 is still a clamshell laptop, its display is mounted along the middle horizontal axis to a hinge bracket.  So you can flip the display inside the bracket 180 degrees, close the clamshell, and use XPS 12 as a tablet.  While the conversion may be shockingly cool for some, for folks who’ve had experiences with Dell in the past, the effect may be just a bit creepy, like a 1959 Philco Predicta TV chassis.

Toshiba’s Satellite U925T has a touchscreen that folds all the way back like a yoga instructor, and then slides forward over the keyboard. It’s a unique effect, but to get a price advantage over Dell of just $50 ($1,149.99), Toshiba traded off screen resolution (1366 x 768) and graphics power, settling for Intel’s “dynamic memory” - allocating memory blocks from the system as needed, rather than using its own discrete graphics memory. 

For $1,399.99 ($200 more than the price of its model 191), Acer bumps the screen size of the Aspire S7-391 up to 13.3 inches. Instead of a full convertible, though, Acer extended the 391’s hinge so you can fold it all the way back, turning your PC into something of a “surface,” to borrow a phrase.

In a move that will likely confuse some customers, HP will mix the Envy, TouchSmart and Intel Ultrabook brands together in one device, which is a bit like naming a car “Cadillac Chevy Shelby.” The Envy TouchSmart Ultrabook 4 is based on the lower-performing Intel Core i3-3217u processor backed up with an AMD graphics processor, 4GB of RAM, and a standard 500GB hard drive, though with a 32GB solid-state accelerator.  All this crank the weight up to about 4 pounds.

The 14.4-inch display will project 1366 x 768 resolution, which is not well-suited for 1080p video, and will definitely look blocky compared to tablets. It also won’t have Dell’s cool tablet-morphing hinge. But it has a $799.99 price tag - a respectable price point for an entry-level PC compared against a $500 tablet. And it helps establish a precedent for PCs as having some greater value than tablets.

2. Power Efficiency

We’re getting closer to the time when you can complete a full day’s work on a single charge. The next dramatic improvements may not come from CPU manufacturers like Intel refining their architecture and manufacturing processes, but by Microsoft adopting a new application architecture.

Last July, in a self-published article on power optimization through software, Intel engineer Manuj Sabharwal showed that simply replacing the routines used by typical Windows programs to tick away the passing moments while they’re idle with the idle process code used in the new WinRT engine, battery life on notebook PCs could be extended by an order of magnitude. That means reclaiming 90% of lost battery power!

While Windows 8 battery life estimates remain similar to those for Windows 7 devices (averaging about 5 hours for laptops, closer to 8 hours for Ultrabooks), other efficiency factors could increase battery life down the road. In Windows 8 the Desktop is no longer rendered using the 3D accelerated engine. While not as cool, it’s also more power-efficient. And though it’s still difficult to find the exit from a Windows RT app (with the touchscreen, there’s a new “wipe-down” gesture), the fact that it consumes almost no power when idle makes quitting them less critical.

The Catch-22

While it’s tempting to toss away the remnants of the “PC era” as old and unfashionable, there’s still a sizable functionality gap between tablets and PCs. Until bandwidth and cloud storage are both cheap and ubiquitous), work devices will require sizable local storage and high processing efficiency during heavy workloads. They’ll also need gesture methods other than just touch, plus real keyboards - not something ripped off of an Atari 400.

The first round of Windows 8 PCs come a step closer to the mobile work device we’ll eventually settle down with. But the strange permutations of convertibility and hybrid hard-drive/solid-state combinations suggests this new class of PC hasn’t yet found its footing.  

While we wait for the perfect Windows 8 PC, tablet prices continue to fall,. Ironically, that may create reasons why tablets will not replace PCs. Tablets could become affordable enough that they don’t have to do double-duty as PC-substitutes just to remain desirable. Plenty of people will choose a tablet, but if you want PC functionality... you can still buy a PC.

PC photos courtesy Acer America, Dell, Hewlett-Packard and Toshiba.