HP, Dell forced to the cloud

The market for traditional servers is being enveloped by the cloud writes Barb Darrow at Gigaom. She says cloud infrastructure companies – read “the biggest customers for servers” – increasingly build their own kit or buy hardware from less-known brands.

This partly explains why Dell and HP are keen to develop their own cloud infrastructures. That and the fact that their traditional customers are increasingly buying cloud capacity, not plonking down big dollars for their own server farms.

Dell and HP both suffer from being big flashy corporations packed with overpaid executives, posh HQs and big marketing spends. That was fine a decade ago. Today’s hardware margins don’t allow such indulgences.

Nor do today’s or tomorrow’s cloud service margins.