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Is Hewlett-Packard's Turnaround Real?

July 30, 2014 | About:

Hewlett-Packard's (NYSE:HPQ) most prominent issue keeps on being its failure to create a protected, exchange wellspring of revenue that can help balance its reliance on the quickly contracting PC industry. While CEO Meg Whitman merits a congratulatory gesture for at last putting the brakes on the organization's proceeded with revenue slide, HP's come back to profitability still would appear to be a tricky dream to a greater part of investors.

One of the highlights of the organization's execution amid the late first quarter was the poor execution of two of its primary working divisions, venture registering and printing, that together record for around 40% of its general revenue created.

HP's venture division posted revenue that stayed generally level on a year-over-year premise, however the genuine foundation for concern was a slight fall in its working edge, an indication of brought down profitability going ahead. Things were further confounded by the rise of Chinese tech monster Lenovo as an influential close term contender, tailing its manage industry rival (NYSE:IBM) to get the last's low-end server business. HP's printing division, the other significant giver to its working profit, happened to record a 2.2% year-over-year drop in revenues amid the quarter.

It's precisely this situation that prompts us to investigate the organization's late augmentation of system that incorporates a standout amongst the most prevalent parts of the cutting edge tech situation - distributed computing. Now is the ideal time to figure out its genuine potential as a giver to HP's future achievement.

The cloudier piece of it

HP as of late published arrangements to contribute to the extent that $1 billion over a time of two years as a component of an activity to create its proprietary distributed computing items and administrations. The organization additionally revealed its aim to make its cloud administrations accessible in upwards of 20 server farms over a 18-month period.

HP Helion influences the Openstack stage to associate open cloud administrations - or machine frameworks focused around general society Internet - with private cloud frameworks that are synonymous with individual organizations. By offering a free form of the product at first, HP is trusting that this "half and half cloud" idea would demonstrate appealing to potential clients, a significant number of whom are reliant on open cloud administrations offered by greater contenders, for example, Amazon.com and Google.

Something to find some hidden meaning

Having neglected to profit by the prevailing blast in cell phones, HP's more extensive push into distributed computing is a welcome, better-late-than-never activity. Evaluating will be an essential perspective to watch out for, however, given that Amazon and Google have as of late sliced charges for their cloud-based offerings trying to stay in front of the quickly developing rivalry.

In the meantime, HP is taking an enormous inside danger through this wander as its distributed computing offerings may well turn out to be the last demise ring for its as of now constrained venture figuring gathering. With the Openstack stage having the capacity to run a complete server farm, HP's offer of workstation servers and related equipment is certain to take an enormous hit sometime.

Shouldn't we think about the others?

Anyhow HP is by all account not the only organization that is taking such a danger at the cost of one of its key working divisions. Also its absolutely by all account not the only potential contestant into the distributed computing domain. Industry peer IBM, which has effectively sold off its low-end server business operations to Lenovo, likewise unveiled aggressive plans as ahead of schedule as January to contribute $1.2 billion to setting up 40 cloud-based server farms spread over 15 nations by the end of this year.

An alternate rival, Cisco (NASDAQ:CSCO), the planet's greatest producer of systems administration gear, additionally uncovered arrangements to make $1 billion in ventures to fabricate cloud-based server farms - part of its new arrangement of offerings under Cisco Cloud Services.


A late survey by research firm IDC has shown a completely new edge to the local cloud administrations situation. More than 400 U.s. organizations have appraised HP as being third on the arrangement of the top-positioning suppliers for cloud administrations for both open and private cloud stages, after IBM and Cisco. That additionally puts HP above Google and Amazon, which rank fifth and seventh on the rundown, individually.

Rating: 3.0/5 (1 vote)



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