After the separation of Hewlett-Packard, new companies solve old problems
After the division of Hewlett-Packard into two companies, the affairs of each of them are not easy. So far, business restructuring does not give positive results.
Printers and personal computers are gradually losing popularity, they are increasingly being replaced by mobile devices. But it was the desktop that brought most of the revenue of HP Inc (now it is an independent company that emerged after the division of the corporation). In October, ended the fourth fiscal quarter of the company. Sales of printers and PCs have decreased by 14% compared with 2014, and the company has worsened its profit forecasts for the next quarter and for the whole of the coming year.
After the division, HP Inc's profit from highly profitable sales of printers will no longer be spent on corporate IT business, which the new Hewlett-Packard Enterprise ( HPE ) company will do. The released funds will be used to increase the percentage of revenue that HP spends on research (the combined company spent only 3.1%). In addition, most of its profits HP Inc. will return to shareholders in the form of dividends.
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HP management plans additional cost-cutting measures. Previously it was assumed that the company would reduce 3,300 jobs in the next three years, but now the plan has been revised - a reduction should occur within one year. Moreover, the number of laid-off employees may be even greater. HP CEO Dion Weisler hopes that the company's position will improve with the release of a new 3D printer model in 2016.
Competing IBM has invested billions of dollars in the development of its own cloud infrastructure. HPE is winding up its cloud business. Many cloud services in the world run on equipment that is not in the HPE range. In this situation, the company is easier to use ready-made software and hardware platform. On Tuesday, HPE CEO Meg Whitman announced a partnership with Microsoft , as a result of which the Microsoft Azure cloud service should become the main cloud platform for HPE. For now, the company focuses on serving customers using its computers.
The HP and Microsoft partnership will affect not only the public, but also the hybrid cloud. Margaret Whitman argues that a strategic agreement was reached between the companies, as both technology giants have a similar vision of hybrid technologies for business, and also see their cooperation as an opportunity to simplify the hybrid infrastructure for greater user convenience.
Together, Microsoft and Hewlett Packard Enterprise can try to challenge Amazon Web Services ( AWS ), which is the undisputed leader in this segment.
On the other hand, “customers want us to help them master cloud technologies,” says Whitman. “Very few companies have completely transferred their applications to public cloud services.” This means that from this point of view, HPE equipment may be quite popular in the market. At the beginning of the year, while still united, HP has stepped up shipments of low-cost servers to cloud service providers. According to Whitman, these efforts are paying off: sales of servers based on Intel processors have increased by 5% compared to last year.
Of course, this growth looks insignificant compared to the pace of development of the cloud technology market as a whole - its growth was 78%, Vedomosti reports.
According to a previously published forecast, Hewlett Packard Enterprise’s annual revenue should exceed $ 50 billion. A reduction of 30 thousand workers and measures to restructure the business will provide the company with annual savings of up to $ 2 billion, which in the long term will allow to achieve long-term operating profitability of 7-9%.
The company is trying to focus on the most profitable business areas, and its profit forecast for the coming year as a whole coincides with the expectations of analysts. In the current quarter, earnings are forecast at 33–38 cents per share, while analysts polled by Thomson Reuters expected an average of 42 cents per share.
Prior to the split, HP's revenue fell in 16 of the last 17 quarters. It is expected that after the split, the revenues of individual companies will change slightly. In the recently completed quarter, revenue from HPE was $ 14.1 billion, from HP - $ 12.7 billion. Analysts polled by Thomson Reuters predicted $ 13.5 billion and $ 12.9 billion, respectively.
HPE stock prices fell on Tuesday by 1% to $ 13.69. HP shares fell 8% to $ 13.50.
Printers and personal computers are gradually losing popularity, they are increasingly being replaced by mobile devices. But it was the desktop that brought most of the revenue of HP Inc (now it is an independent company that emerged after the division of the corporation). In October, ended the fourth fiscal quarter of the company. Sales of printers and PCs have decreased by 14% compared with 2014, and the company has worsened its profit forecasts for the next quarter and for the whole of the coming year.
After the division, HP Inc's profit from highly profitable sales of printers will no longer be spent on corporate IT business, which the new Hewlett-Packard Enterprise ( HPE ) company will do. The released funds will be used to increase the percentage of revenue that HP spends on research (the combined company spent only 3.1%). In addition, most of its profits HP Inc. will return to shareholders in the form of dividends.
')
HP management plans additional cost-cutting measures. Previously it was assumed that the company would reduce 3,300 jobs in the next three years, but now the plan has been revised - a reduction should occur within one year. Moreover, the number of laid-off employees may be even greater. HP CEO Dion Weisler hopes that the company's position will improve with the release of a new 3D printer model in 2016.
Competing IBM has invested billions of dollars in the development of its own cloud infrastructure. HPE is winding up its cloud business. Many cloud services in the world run on equipment that is not in the HPE range. In this situation, the company is easier to use ready-made software and hardware platform. On Tuesday, HPE CEO Meg Whitman announced a partnership with Microsoft , as a result of which the Microsoft Azure cloud service should become the main cloud platform for HPE. For now, the company focuses on serving customers using its computers.
The HP and Microsoft partnership will affect not only the public, but also the hybrid cloud. Margaret Whitman argues that a strategic agreement was reached between the companies, as both technology giants have a similar vision of hybrid technologies for business, and also see their cooperation as an opportunity to simplify the hybrid infrastructure for greater user convenience.
Together, Microsoft and Hewlett Packard Enterprise can try to challenge Amazon Web Services ( AWS ), which is the undisputed leader in this segment.
On the other hand, “customers want us to help them master cloud technologies,” says Whitman. “Very few companies have completely transferred their applications to public cloud services.” This means that from this point of view, HPE equipment may be quite popular in the market. At the beginning of the year, while still united, HP has stepped up shipments of low-cost servers to cloud service providers. According to Whitman, these efforts are paying off: sales of servers based on Intel processors have increased by 5% compared to last year.
Of course, this growth looks insignificant compared to the pace of development of the cloud technology market as a whole - its growth was 78%, Vedomosti reports.
According to a previously published forecast, Hewlett Packard Enterprise’s annual revenue should exceed $ 50 billion. A reduction of 30 thousand workers and measures to restructure the business will provide the company with annual savings of up to $ 2 billion, which in the long term will allow to achieve long-term operating profitability of 7-9%.
The company is trying to focus on the most profitable business areas, and its profit forecast for the coming year as a whole coincides with the expectations of analysts. In the current quarter, earnings are forecast at 33–38 cents per share, while analysts polled by Thomson Reuters expected an average of 42 cents per share.
Prior to the split, HP's revenue fell in 16 of the last 17 quarters. It is expected that after the split, the revenues of individual companies will change slightly. In the recently completed quarter, revenue from HPE was $ 14.1 billion, from HP - $ 12.7 billion. Analysts polled by Thomson Reuters predicted $ 13.5 billion and $ 12.9 billion, respectively.
HPE stock prices fell on Tuesday by 1% to $ 13.69. HP shares fell 8% to $ 13.50.
Source: https://habr.com/ru/post/296744/
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