Hewlett-Packard Company (HPQ): This Company Is Still Trying to Solve Yesterday’s Problems

Most companies might define a “moonshot” as something huge and transformative. Google Inc (NASDAQ:GOOG), for example, aims for improving something 10 times over its current capabilities. The search giant’s moonshot programs include things like self-driving cars, augmented reality, a connected house, a space elevator… you know, really big ideas. It’s exciting to see private enterprise try to take a leading role again in the pursuit of next-generation technology, but not everyone has Googley ambitions.

Hewlett-Packard (HPQ)

Hewlett-Packard Company (NYSE:HPQ), for example, will be unveiling its “Project Moonshot” platform at an April 8 webcast. What is Project Moonshot? Is it a new PC that can fly? A personal robot assistant? An actual moonshot, like Elon Musk’s SpaceX?

No, Hewlett-Packard Company (NYSE:HPQ)’s “moonshot” is a scalable server. Way to set a low bar for yourselves, guys.

Wrong direction
The Project Moonshot server, according to Computerworld, is “the culmination of close to one-and-a-half years of Hewlett-Packard Company (NYSE:HPQ)’s experimentation in low-power server designs for hyperscale environments,” with hyperscale being industry terminology for a setup that can rapidly scale from a few servers to a few thousand with relatively few issues.

Why does that sound familiar? Maybe because Amazon.com, Inc. (NASDAQ:AMZN) has essentially defined the maximally scalable server with its Elastic Compute Cloud (EC2), a fully virtual server infrastructure that can be rented out by the hour and scaled across a vast network of Amazon machines, all without the user ever needing to operate servers of their own. Hyperscale also happens to be a pretty good term for Google’s distributed-computing setup, which was originally known as MapReduce before the search giant moved on to even better solutions for solving big problems across lots of smallish, cheapish servers.

HP is building machines for companies that have never heard of cloud computing.

Maybe there are some benefits…
Let’s not be too hasty, though. Computerworld goes on to say that:

With the low-power servers, Hewlett-Packard Company (NYSE:HPQ) is placing preference on faster delivery of information rather than processing power. [CEO Meg] Whitman last month said that the Project Moonshot platform would use 89% less energy, 94% less space and cost 63% less than a traditional x86 server environment. Traditional x86 server environments use the more power-hungry Intel Corporation (NASDAQ:INTC) Xeon or Advanced Micro Devices, Inc. (NYSE:AMD) Opteron processors, which have more processing power and are seen as being more suitable for data-intensive workloads such as databases.

HP, in a case study, said a Moonshot server installation occupying one-half a rack, priced at $1.2 million and drawing 9.9 kilowatts, could replace an installation of 1,600 servers priced at $3.3 million and drawing 91 kilowatts per hour.

That’s not too bad, and it could give Intel investors pause — the chip maker’s fourth-quarter results had little in the way of good news beyond the growth of its data center segment, which develops those Xeons and other server products. It’s not likely to be particularly dangerous, though. In addition to the initial ARM Holdings plc (ADR) (NASDAQ:ARMH) design, Hewlett-Packard Company (NYSE:HPQ) also has an Intel Atom-based Moonshot server in the works. Given the dominant role of Intel-based servers at the moment and the need to reprogram for a new chip, I wouldn’t expect too much quaking in Intel’s boots.