Russ Daniels is VP and CTO for Cloud Services Strategy at IT behemoth, Hewlett-Packard [HPQ]. In a recent conversation, which has just been released as a podcast, we discuss the various ways in which the Cloud impinges upon HP’s current and future business.

During our conversation, Russ talks about the obvious impact upon HP’s data centre and server operations, but also sheds light on some of the wider ramifications of current trends for a visible and multi-faceted brand such as HP. Last year’s acquisition of EDS is also discussed, and is clearly considered important in helping HP to market its range of services to Cloud-averse enterprise customers.

Show notes are available from Talis‘ Nodalities blog.

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Twitter is aflutter once again this morning, this time over a Wall Street Journal suggestion that ‘IBM in talks to buy Sun.’ I am not able to comment on the veracity of the rumour itself, but it’s clear that Sun needs to do something in order to strengthen its position in a competitive market. Selling to IBM is certainly one route, but an easier one might be the provision of a more complete Sun-badged proposition.

Elsewhere on WSJ.com this morning, in news that seems extremely unlikely to be unconnected, Don Clark reports on Sun’s

“plans to offer its own cloud-style services. Sun also plans to offer software, as well as hardware, to other companies that want to build clouds.”

Alongside competitive enterprise server hardware and Sun’s widely used stable of open source software (Solaris, Java, MySQL, OpenOffice, etc), this latest announcement of ‘Sun Cloud Storage’ (equivalent to Amazon’s Simple Storage Service, S3) and ‘Sun Cloud Compute’ (equivalent to Amazon’s Elastic Compute Cloud, EC2) should make Sun a serious player in the Cloud Computing space in a way that their abortive network.com never really did.

So why is anyone discussing either a desire on Sun’s part to sell, or a desire on IBM’s part to consider buying?

I’ve greatly enjoyed the insights of Sun CEO Jonathan Schwartz, especially as enunciated most recently on his blog in two videos discussing community adoption of Sun’s open source software and the commercial models Sun deploys to monetise that community. Despite Jonathan’s arguments, though, it seems to me that Sun lacks a fundamental piece of the whole; an effective and highly visible professional services arm. IBM has this. HP, with the purchase of EDS, has this. Accenture and gang are this, but nothing makes them choose to use or recommend Sun over its competitors today.

As Jonathan discusses in the first of the videos I pointed to (YouTube version embedded below, in two parts), Sun has been successful in encouraging use and innovation around a suite of open source operating systems, tools and applications.

Indeed, it was little more than a year ago that the company announced plans to spend some $800 million in acquiring European open source web database company MySQL. The problem is that these solutions are all freely downloadable from the Web, and the inevitable professional services and consultancy work associated with enterprise delivery — which could generate so much revenue — goes to far more companies than just Sun.

Alongside the software, Sun has a competitive range of hardware offerings in the enterprise space, and sells these in competition with IBM, HP, Dell and the rest.

By omitting a compelling and enveloping professional services proposition, Sun damages its own ability to capitalise upon its software and hardware efforts. Potential customers download Sun software, and then run it on anything; Sun gets a very small slice of the hardware sales. Sun isn’t doing badly at selling hardware, but maybe a more rounded services proposition would enable them to do better, despite Jonathan’s points in the commercial innovation video.

With more emphasis on offering a comprehensive package of solutions — whilst not removing choice and the vibrant open source community of which Jonathan speaks — might Sun not be a more obvious choice for customers in need of services and support?

An acquisition might, as Larry Dignan writes, make sense. But there’s plenty of life left in a standalone Sun, too… if it can monetise more of those downloading free software or steer more of those who ‘just need a server’ towards one with a Sun badge on the front. Professional Services are the road to both.

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