HP wants to invest $1 billion in open-source cloud computing

Hewlett-Packard Co. said it is investing more than $1 billion over the next two years to develop cloud-computing software and tools, a move it considers necessary to ward off competition even if it means cannibalizing its legacy hardware and software businesses. The investment would account for a substantial portion of H-P’s shrinking research-and-development budget, which fell 8% last fiscal year to $3.1 billion. It will also go toward hiring more developers and consultants to design, build and run cloud systems. The company said it will expand the availability of its cloud software from two data centers to 20 over the next 18 months. But the commitment pales in comparison with cloud investments from bigger competitors such as Google Inc., Amazon.com Inc. and Microsoft Corp., which are spending $1 billion to $2 billion a quarter to build data centers and acquire the necessary real estate, on top of billions more in R&D each year.