Hewlett-Packard rolled out VirtualSystem, a cloud-a-box-offering, at VMworld today.  The offering blends HP storage, servers and networking gear with the latest version of VMware ESXi and the vSphere 5.0 VM management tools, as well as HP’s Insight automation software. Customers can use existing vSphere licenses, or buy ones preinstalled on the pre-configured hardware.

The VirtualSystem rack breaks down into several components. That includes tech from 3PAR and Lefthand, with the latter one providing  snapshot to recover, transparent fail over,  and allowing users to run Lefthand in a VM.

“Craig Nunes, director for marketing at HP Storage, said LeftHand serves as the building block for the VirtualSystem and the biggest advantage is that customers won’t need standalone storage systems. Storage can be a large expense in virtualized environments,” ZDNet reports.

Sean Kinney, director of HP Storage, added that HP is improving the set-up wizards so it’s easier to launch VirtualSystem with thin provisioning.”

Hewlett-Packard is targeting a very broad market with VirtualSystem.  The offering,  starting at $167,3000, comes in three configurations, and can be scaled down for SMB use by channel partners.  Another interesting thing to note is that it competes with VCE, a joint venture shipping a similar product that VMware is also invested in.  All in all, VirtualSystem is promised to deliver greater VM mobility, reduce storage costs and allow remote administration.

Hewlett-Packard is pushing further and further away from its low-margin consumer hardware business, set to be spun-off soon. Competitor Dell is also delving into the cloud, though it’s still sticking with its PC business as well.

Today at VMworld, Dell made a big announcement about its upcoming IaaS services, which begin with VMware integration.  It launched the one for customers running VMware’s hypervisor at the conference, and will soon be introducing its OpenStack and Azure cloud-based solutions as well.