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The cloud strategy of Hewlett-Packard (NYSE:HPQ) is starting to come together, and it looks to be all about the telcos.

The HP Cloud is based on OpenStack, a technology first sponsored by Rackspace (NYSE:RAX), as its infrastructure, with Cloud Foundry from VMware (NYSE:VMW) as its platform. The idea is that the HP Cloud will be compatible with what most enterprises are putting in for their "private cloud," and that its additional capacity will create a "hybrid cloud" that is competitive in the market.

At its HP Discover event in Europe, all this was pitched toward telcos, now called "communication service providers," as a way for them to create new revenue streams and leverage "big data." The telcos will, with HP's help, be able to offer "software, services and solutions," high-margin computing systems that can take the load off enterprise systems within their service territories.

All this is being done under names like HP Enterprise Services and the HP Converged Cloud portfolio with the company explaining that while telcos know they need to be offering cloud, they don't really know how to do it.

Not only don't they know how to do it, they don't know how to sell it, and they don't know what to do with it. Meg Whitman is betting her tenure at the company on being able to turn former telco monopolies around the world into agile competitors using HP technology. I'm concerned this is one of those dances where both partners expect the other to lead, and fall over.

HPQ is up about 5% in recent days but frankly I don't see why. It has a story to tell, but it's a story I've seen before, and I know how this story has always ended in the past.

It's always ended in tears.

Source: Hewlett-Packard Cloud Strategy Starts Coming Together