HP Drops Out Of The Race, Investors Should Drop Out Of HP

With confirmation that Hewlett-Packard’s (NYSE:HPQ) attempt to move into the cloud arena is coming to an end, the outlook for the company continues to spiral. The company announced that it will sunset the HP Helion Public Cloud by Jan. 31, 2016, effectively ending its attempt to compete with rivals Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) for the public cloud market. The news comes on the heels of the company’s recent announcement of its upcoming demerger as HP attempts to revive itself.

End of Helion

The move tops off the company’s gradual downplaying of its offering a public cloud over the past year. While it will continue to offer private cloud services with the ability to operate within the public clouds offered by Amazon and Microsoft , the company’s withdrawal from the public cloud market demonstrates how much its fortunes have changed over the past few years.

Demerger

The Helion announcement comes after the news, announced last year, that HP will be splitting apart into two companies. HP Enterprise will be in charge of the company’s enterprise software, services and infrastructure, while HP, Inc. will focus on the company’s personal computers and printing arms.

HP has suffered declines over the past decade. With the increase in use of smartphones and tablets, sales of HP’s mainstays, desktops, laptops and computer peripherals, have fallen significantly just in the past three years.

Comparison with Amazon

The public cloud marketplace is dominated by three major players, including Microsoft, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Amazon. Amazon continues to show strong growth as customers are moving their computing resources into the public cloud arena. Amazon currently shows growth of its cash flow of 27.7 percent, which is much higher than that demonstrated by either its peers or the industry average.

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