HP’s earnings came out this week, and while it was a mixed bag of good news and bad news revenue-wise, at least one analyst is optimistic that the split of the company in two will help the newly-formed HP Enterprise focus on what could be an important area of growth for the company: cloud computing.
New Hampshire-based Technology Business Review Inc. reports that HP’s $7.6 billion in Services revenue in 3Q14 was down 5.9% from the year-ago quarter and 0.8% sequentially. Enterprise Services declined 6% year over year. One area of growth was the company’s Strategic Enterprise Services segment which includes cloud, security, mobility and analytics, and reportedly grew by double-digits from the year-ago quarter, TBR said.
+ MORE AT NETWORK WORLD: Breaking up is hard to do, but HP won’t look back +
While splitting the company up into two acknowledges past failures, TBR Inc. analyst Cassandra Mooshian believes having a business-focused company in HP Enterprise (HPE) along with a consumer one named HP Inc. will remove the awkward structure of united company where various business units were essentially competing with one another.
This could have a dramatic effect on the company’s cloud computing division, Mooshian adds. HP is betting big on the cloud, having in the past said it plans to invest $1 billion in building out its HP Helion cloud portfolio. “The establishment of a dedicated HP Cloud group has unified HP’s cloud go-to-market efforts and messaging, enabling the company to more quickly and effectively act upon its cloud initiatives and meet customer demands,” Mooshian wrote. Case in point: the company recently inked a deal to offer a disaster recovery as a service with Symantec. DRaaS is a good first step for many enterprise cloud use cases.
“TBR believes HP will be even better positioned to execute on its cloud initiatives in 2016 as HPE takes shape, permitting Helion solutions to be seen as a technology and platform-agnostic cloud provider,” the analyst wrote. “We expect HPE will to look for strategic acquisition opportunities in cloud in 2016, particularly around open-source, to complement its portfolio while breaking ties from the PPS group will enable HP to partner with cloud vendors that previously would have had overlapping portfolios, particularly in the devices arena.”
HPE will have an uphill battle in the cloud though. Amazon Web Services dominates the IaaS market with Microsoft Azure just beginning to turn the heads of some enterprises, according to a Gartner analyst. Meanwhile, companies like Google, VMware, CenturyLink, Verizon and many others are looking to complete in this market as well.
To get a full download on HP’s cloud plans, including the importance of OpenStack in its efforts, check out the Q&A interview Cloud Chronicles and Network World editor in chief John Dix did with Bill Hilf, an HP cloud executive where he discusses how he sees the company fitting in the broader market.