Is HP (NYSE:HPQ) to make a mistake by acquiring Eucalyptus? Time will tell

This morning started with a shock as Hewlett Packard Company (NYSE:HPQ) announced that it was to acquire the vendor Eucalyptus. With the history of both the firms, this news was never expected to surface, by anyone in the market audience.

When the CEO of Eucalyptus, Maten Mickos reported that he was captivated with the project OpenStack- despite all the years spent telling people that it was a failed project. His change in opinion makes more sense now that this news has broken; OpenStack does have a lot of HP’s (NYSE:HPQ) cash invested in it. Neither of the companies is making any comments on price but sources state that it must be less than about $100 million while Eucalyptus raised nearly $55 million.

This is the first deal HP (NYSE:HPQ) commenced since the Autonomy acquisition which still has tremors in court. This doesn’t seem like such a good start for the company since shareholders have little confidence regarding HP (NYSE:HPQ) being a good enough company. Its future may be at stake if it doesn’t act wisely.

A lot of industry insiders assumed that bankruptcy was to become of Eucalyptus as it failed to see any sort of massive transaction. It saw OpenStack as a foe despite Mickos’s credibility.

A few months back, HP (NYSE:HPQ) once again launched its cloud offer with the name Helion. It seemed as a dead streak as no one was known to really use it as it was only a minor booster with the OpenStack products that got minimal transaction.

Instead of focusing on initial cloud offerings as well as executive opportunity or pushing Helion as a platform, HP (NYSE:HPQ) acquired Eucalyptus. This deal is most certainly going to unleash a monster out into the market.

One may only need to look at the amount of employee changes that have occurred in the HP (NYSE:HPQ) cloud department. The executive, Biri Singh resigned last year; Martin Fink ran the business ever since and Mickos is aiming to take over now. He will be reporting to Meg Whitman, the CEO, but no one can guess whether anything will be achieved considering the issues Whitman has on the hand. With such massive changes in only a year’s time, the company’s outlook may be questioned anytime soon.

Mickos is well acquainted with the cloud. Eucalyptus definitely is one interesting project, however it is hard to assume that the project would not die down within HP (NYSE:HPQ), like so many in the past. An HP (NYSE:HPQ) executive reported that there may be a lot of strategic discussions that will take place thus referring to how Eucalyptus will be seen in the OpenStack ecosystem.

This might turn out to be a complete debacle. With no proper strategy and plan, where is the proof that HP (NYSE:HPQ) knows how vital the cloud is. The deal may eventually turn out to be a poor judgment on both the firms and all eyes are on how HP (NYSE:HPQ) will pull this off considering its previous case is still a subject of conversation in the market.