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HP Backs into the Cloud

HP has said it doesn’t want to be in the cloud business itself – merely sell gear to cloud makers

HP has said it doesn’t want to be in the cloud business itself – merely sell gear to cloud makers – but it’s lined up with little Salesforce.com rival NetSuite – owned mostly by Larry Ellison – to offer NetSuite’s SaaS CRM and ERP applications to SMBs through its 15,000 US resellers.

HP now has a referral program for its channel, which can offer their own value-added management and implementation services alongside the NetSuite widgetry as part of HP’s Total Care portfolio.

The yet-to-be-profitable Netsuite, which has organized dedicated marketing resource in support of the HP channel, is counting on the arrangement to accelerate its market penetration and keep the wolf from the door.

It’s been having trouble getting contracts signed, spoiling last quarter, a situation it expects will repeat again this quarter.

Resellers will be compensated for any deals that close.

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Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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ericnovikoff 11/12/08 12:38:36 PM EST

As a customer of NetSuite, I am generally satisfied with their product, and it has delivered on the promise of making my smallish company work more like a biggish one. I'm planning on including NetSuite in my company's expansion plans. However, calling NetSuite a cloud company is a gross misnomer that doesn't serve the buying public. Cloud computing falls into two categories: infrastructure delivery (such as Amazon or ENKI) and applications delivery (such as Google). James Staten of Forrester defines Cloud Computing as "A pool of highly scalable, abstracted infrastructure, capable of hosting end-customer applications, that is billed by consumption." Consumption billing is a vital characteristic of all Cloud Computing, because of the essential value proposition it offers of no up-front spending and only paying for what you use. NetSuite (and quite a few other SaaS providers) don't qualify here in that they charge a yearly fee and a flat per-feature fee, much like the giant ERP suites of old. Consumption billing is scary if you're the provider - but the benefits to the customers are self-evident, including savings as well as keeping the vendor engaged and honest.

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