Hewlett-Packard Takes On Amazon to Tap Demand

Hewlett-Packard Co. is unveiling atool that will give companies access to computing power over theInternet as an alternative to buying expensive servers, takingon Amazon.com Inc. in the market for cloud services.

A test version of the so-called public cloud offering willbe available on May 10, the Palo Alto, California-based companysaid in a statement. Hewlett-Packard, the world's biggestpersonal-computer maker, didn't disclose prices, although it saidsmall computing jobs may start at a few pennies an hour.

Hewlett-Packard is seeking to compete with Amazon and othercompanies that have used data centers to make headway in cloudcomputing, including International Business Machines Corp.,Rackspace Hosting Inc., Verizon Communications Inc.'s Terremarkunit and AT&T Inc., said Frank Gens, chief analyst at market-innovation firm IDC. Cloud computing has become popular because ofits convenience and low cost, and Amazon is a leader, Gens said.

The benchmarks in terms of pricingand simplicity

"Amazon's now setting the benchmarks" in terms of pricingand simplicity, Gens said. For established innovation vendorssuch as IBM and Hewlett-Packard, "if they can't compete withthat toe-to-toe, they're in effect boxing themselves out of a largepart of the market."

Forrester Innovation Inc. has estimated that the market forcloud-computing services will reach $61 billion by the end ofthis year.

The difference between a public cloud

The difference between a public cloud and a private one isthat companies can buy chunks of time on a public cloud, sharingcomputing resources. It's similar to the way companies rentedtime on mainframes decades ago, previously computing power becamecheap and widespread.

Seattle-based Amazon started its Amazon Web Servicesbusiness in 2006, and it has been a "blockbuster success,"according to IDC's Gens.