Hewlett Packard Enterprise HPE

Hewlett Packard Enterprise is a technology innovation company that accelerates business transformation. It manufactures servers, supercomputers, storage systems, storage networks, network equipment, converged systems, and also builds cloud infrastructures and solutions in the Internet of Things segment.

Structure

By December 2018, HPE's structure consists of the following main divisions:

• Hybrid IT (servers, storage systems and some network equipment);
• Intelligent Edge (Data Analysis and Solution Development Systems) at the sites where the data is generated. Such technologies include HPE products in the field Internet of Things);
• Financial Services.

Business in Russia

Main article: NRE Russia (Hewlett Packard Enterprise)

Performance indicators

2023: Sharp Decline in Server Sales

At the end of the fiscal year, closed on October 31, 2023, Hewlett Packard Enterprise (HPE) received $29.14 billion in revenue. This is 2% more compared to the result for fiscal 2022 - $28.5 billion. Such figures are given in a report published on November 28, 2023.

In the Compute division, which is responsible for servers, sales on an annualized basis decreased by 11% - from $12.85 billion in fiscal 2022 to $11.44 billion in 2023. A decrease in demand was also recorded in the segment of data storage systems (DSS): sales year-on-year decreased by 4% - from $4.6 billion to $4.42 billion.

HPE recorded the largest revenue growth in fiscal 2023 in the direction of Intelligent Edge, which combines network solutions, products for the Internet of Things, etc. Sales of this group reached $5.2 billion against $3.67 billion a year earlier: thus, the increase was about 42%. Solutions for artificial intelligence and high-performance computing (HPC&AI) brought in $3.91 billion against $3.19 billion in fiscal 2022, corresponding to a 23% increase. Financial services accounted for $3.48 billion, which is 4% more than the result for fiscal 2022, when revenue in this segment was $3.34 billion.

NPE's net annual profit reached $2.03 billion. For comparison: in 2022, this figure was recorded at $868 million. Thus, the growth was about 133%. Earnings per security increased from $0.66 to $1.54.

We have shown record results in key areas. Our strategic investments and innovations in areas such as edge computing, hybrid cloud and artificial intelligence resonate with customers, "said Antonio Neri, President and CEO of the NRE.[1]

2021: Tenth in the world among ICT developers by revenue

According to Synergy Research Group, the total revenue of the 13 largest manufacturers of software and ICT services for business, including telecom operators, reached $613 billion in this market in 2021, which is 10% more than a year earlier. HPE was ranked tenth on this list.

2020

Global Server Market Share - 14.4%

HPE's share of the global server market was 14.4% (IDC data ). Read more here.

Losses after major write-offs

The fiscal year 2020 HPE ended with revenue of $26.99 billion, which is less than the one-year-old figure of $29.14 billion. The main reasons for this decline were servers and, sales storage systems of which decreased by 10% - to $12.22 billion and $4.68 billion, respectively.

In the Intelligent Edge segment, revenues decreased by 2%, to $2.86 billion. The financial services business brought HPE about $3.35 billion, which is 6% less than in 2019.

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In the direction of HPC&MCS (HPC solutions), annual revenue of $3.04 billion was registered, which is 4% higher than a year ago. Another source of income for HPE is related to the provision of consulting and other professional services. Here, the company earned $951 million in fiscal 2020 against $1.01 billion a year earlier.

Approximately 40% of HPE's annual revenue came from the Americas (34% in the United States). EMEA and Asia-Pacific were 36% and 24%, respectively.

In 2020, HPE received a loss of $322 million against a profit exceeding $1 billion in 2019. The loss is largely due to the write-off of $865 million due to the impairment of goodwill, an asset that characterizes the company's intangible advantages over its competitors in the market. This includes business reputation, customer base, personnel qualification, brand, etc.

As HPE CEO Antonio Neri noted, at the end of the financial year the company received "good results,... especially in key business areas. "

By the end of October 2020, HPE had accumulated $4.2 billion in cash and reserves and $4.8 billion in borrowed funds.

On the day of publication of the annual statements (December 1, 2020), the value of HPE shares remained practically unchanged. Since the beginning of the year, quotes have sagged by 29%, the agency notes. Bloomberg^[2]

History

2024: Juniper Networks purchase

On January 9, 2024, HPE announced that it had entered into an agreement to acquire network equipment manufacturer Juniper Networks. The amount of the transaction, which is planned to be carried out entirely at the expense of funds, is approximately $14 billion. Read more here.

2023

Investment in Aleph Alpha

On November 6, 2023, German artificial intelligence startup Aleph Alpha announced a Series B funding round, during which $500 million was raised for development. Funds, among others, were provided by Bosch, SAP and HPE. Read more here.

Sale of interest in H3C

On May 26, 2023, the U.S. Securities and Exchange Commission (SEC) announced that Hewlett Packard Enterprise (HPE) had entered into an agreement to sell its stake in the Chinese joint venture of the Server and Storage Systems (H3C) DSS. The transaction amount will be $3.5 billion. Read more here.

2021

Buying a platform developer to increase SQL Ampool speed

In early July 2021, HPE announced the purchase of the creator of the SQL Ampool speed platform . The financial terms of the transaction were not disclosed. Read more [Ampool 'here]].

Purchase of Zerto ransomware software developer

At the end of June 2021, HPE announced the purchase of cloud management and storage protection solutions provider Zerto for $374 million. The acquisition of HPE Zerto is expected to add more than $130 million in revenue as HPE continues its transition to cloud-based software-defined data services. Read more here.

Purchase of AI accelerated learning software developer Determined AI

In mid-June 2021, HPE announced the acquisition of a software developer to speed up the training of artificial intelligence algorithmsDetermined AI. The financial terms of the transaction were not disclosed. Read more here.

2020

Moving headquarters from Silicon Valley to Texas

HPE, following other IT companies, is moving its headquarters from Silicon Valley to Texas to save HPE. The manufacturer of servers and network equipment announced this on December 1, 2020.

By this time, Hewlett Packard Enterprise's head office is located in San Jose, California, and in the San Francisco Bay Area there are small representative offices of the company. The company began construction of a new campus in Houston (Texas, it is the fourth largest city in the United States).

How many employees will be affected by the move is not specified, but HPE promises to refrain from layoffs. San Jose will remain the HPE Research Center, and major administrative functions will be moved to Texas. Employees from other HPE units scattered across California will move to the vacated areas in San Jose. The company hopes that this will reduce the cost of maintaining and renting office real estate in one of the most expensive states in the country.

HPE already has several offices in Texas cities, including Austin and Plano, and Houston has more than 2,600 employees.

The coronavirus pandemic COVID-19 has become a powerful impetus for many Silicon Valley companies, notes. CNBC The crisis has caused businesses to consider leaving California and moving to regions with better rental, living and tax conditions. In addition, most companies have switched to full. remote

Thus, the manufacturer of software for special services Palantir Technologies moved its headquarters from California Palo Alto to Denver, and the developer of cloud storage Dropbox decided to move to Austin.

But HPE's move is particularly notable because Hewlett-Packard was one of Silicon Valley's first successful companies. It is based on partners Bill Hewlett and Dave Packard in a garage in Palo Alto in 1939, according to a CNBC publication.^[3]

Finalizing $925m Silver Peak acquisition

Hewlett Packard Enterprise completed the purchase of Silver Peak, the developer of SD-WAN technology, for $925 million, entering into a sharp rivalry with longtime competitor Cisco Systems in the corporate network market. This became known on September 22, 2020. Read more here.

Purchase of SD-WAN technology developer Silver Peak for $925 million

On July 13, 2020, HPE announced the acquisition of Silver Peak for $925 million. The deal is expected to close by the end of October. First, it must be approved by regulators. Read more here.

25% reduction in management salaries

On May 21, 2020, HPE announced a large-scale cost optimization program, which, among other things, involves reducing the salaries of top managers. The measures being taken are aimed at saving at least $1 billion by 2022.

Starting July 1 and ending fiscal 2020, the base salary of CEOs and CEOs at the executive vice president level will be reduced by 25%. In addition, members of the board of directors agreed to a 25% reduction in annual compensation of $100 thousand.

A short-term reduction (by four months) in salaries is also introduced for ordinary employees. At the same time, it is not specified in which regions and how much payments will be cut. It is noted that in countries in which it is forbidden to reduce salaries, employees will be sent on underpaid leave.

HPE also intends to revise its real estate portfolio, strengthen the transition to digital interaction with customers and take other measures aimed at overcoming the crisis caused by the outbreak of the COVID-19 coronavirus.

I expect 50% of employees will never return to the office. This means that offices will become a place to work together, not a place where you just come to work every day, "said HPE CEO Antonio Neri at a conference on the publication of financial statements.

According to him, the company does not know what the "new normality" will be at the end of the coronavirus pandemic, but it is already redistributing resources to growing business areas, digital projects and areas that allow improving business efficiency.

On May 21, 2020, when HPE announced a cost-cutting program, the company's shares fell 6% in price in electronic trading after the close. exchanges. Since the beginning of the year, quotes have slipped by 35%.^[4]

Purchase of Scytale, a software developer for systems that do not trust anyone

In early February 2020, HPE announced the purchase of Scytale. The financial component of the agreement was not disclosed by the company. Read more here.

2019

Revenue slump by 6% to $29.14 billion due to weak server demand

In fiscal year 2019, which came to an end on October 31, 2019 HPE , it raised $29.14 billion, which is 6% less than a year earlier. If we exclude server sales for 1 data centers Tier (the company almost completely curtailed this business) and currency fluctuations, then sales fell not so much - by 2%.

As noted by Bloomberg, HPE's revenue declined in every quarter of the 2019 financial year, while there was previously growth. The fall began due to weakening demand for servers, which, in turn, was caused by economic problems.

According to the head of HPE Antonio Neri, the tense situation in world trade creates uncertainty, which leads to an increase in product sales cycles. In addition, due to geopolitical factors, some customers are delaying placing orders, he added.

In 2019, the revenue of the HPE Hybrid IT division (servers, DSS, network equipment) reached $22.8 billion, a decrease of 7% compared to 2018. The company's revenues in the server market decreased by 8%, and storage sales fell by 2%. At the same time, the American vendor pointed to an increase in sales of products in the field of high-performance computing and hyperconverged infrastructure by 15% and 25%, respectively. Nimble Storage sales jumped 35%.

Servers accounted for 56% of the annual revenue of HPE Hybrid IT, DSS - 16%.

Towards Intelligent Edge (data analysis and solution development systems at sites where data is generated; such technologies include HPE products in the field of the Internet of Things) at the end of 2019, revenue of $2.8 billion was registered. This is 3% less than a year earlier.

HPE's annual net profit was $1.05 billion, significantly less than the $1.91 billion profit a year ago.^[5]

Purchase of MapR Technologies Big Data Analysis File System Developer

In early August 2019, HPE announced the acquisition of big data analytics file system developer MapR Technologies. Read more here.

Purchase of supercomputer manufacturer Cray for $1.3 billion

May 17, 2019 HPE officially announced the acquisition of the manufacturer supercomputers Cray for $1.3 billion. We are talking about the largest purchase by HPE, which appeared as a result of the division. Hewlett-Packard More. here

Former Autonomy financial director sentenced to 5 years in prison for fraud ahead of HP deal

On May 13, 2019, former Autonomy CFO Sushovan Hussain was sentenced to 5 years in prison for fraud before entering into a deal in which the company was sold to computer manufacturer Hewlett-Packard for $11.1 billion in 2011. Read more here.

2018

Up 11% to $30.9 billion in revenue from servers and DSS

In the 2018 fiscal year, which closed on October 31, 2018, HPE's revenue amounted to $30.9 billion, which is 7% more than in the previous year. If you do not take into account fluctuations in exchange rates, then the company's sales rose by 5%. In 2017, revenue fell.

In the HPE Hybrid IT division, which is responsible for the company's business in the field of servers, storage systems and network equipment, annual revenue rose 6%, exceeding $25 billion. Server sales increased 8% to $13.8 billion. Revenues in the DSS market increased even more - by 13% to $3.7 billion. The implementation of network solutions for data centers turned out to be equal to $225 million, which is 5% higher than a year ago.

In the support and consulting division of HPE Pointnext, the turnover remained almost unchanged - $7.3 billion. The financial services business brought the company $3.7 billion in revenue against $3.6 billion a year earlier.

In the Intelligent Edge segment (data analysis and solution development systems at sites where data is generated), the company earned $2.9 billion for fiscal year 2018, which is 13% more than in 2017. Sales of HPE Aruba products accounted for $2.6 billion (+ 14% year-on-year), HPE Aruba services - $310 million (+ 12%).

For the 12-month reporting period, which ended on October 31, 2018, HPE's net profit amounted to $1.9 billion, an increase from $344 million a year earlier.

Most of HPE's revenue - 40% for 2018 fingod - still comes from North America. The US market, in particular, provided the company with revenue of 33% of the total. In the EMEA region, the share of turnover was 37%, in the Asia-Pacific region - 23%. HPE revenues grew the most in Europe, the Middle East and Africa: here in 2018 there was a 13 percent rise.^[6]

Purchase of BlueData Software Developer

In late November 2018, HPE announced the acquisition of BlueData to accelerate the development of artificial intelligence and Big Data. The value of the deal, which is scheduled to close before the end of January 2019, has not been made public. Read more here.

Recommendations for partners to buy server chips from AMD, not Intel

In September 2018, HP Enterprise (HPE) began urging its partners to purchase server processors from AMD instead of Intel so as not to face a shortage of chips.

However, according to the Taiwanese information portal DigiTimes, citing sources in the supply channel, other server manufacturers have no problem purchasing Intel server solutions. Probably, the recommendations of the HPE to their partners indicate changes in the strategy.

According to IDC analysts, in the second quarter of 2018, HPE lost to Dell the first place in the server market and recorded a 12.4 percent decrease in equipment supplies. The market share of the American company fell from 20% to 15.1%.

HPE partnered with Foxconn to operate in the cloud data center server market, seeking to offset lost orders from customers who preferred public clouds over the local infrastructure deployed at their facilities. The three-year partnership between HPE and Foxconn has not yielded significant results, and since then the American vendor has preferred to work alone in the server market. However, competition here is aggravated due to the presence of numerous ODM manufacturers supplying equipment directly to data centers.

HPE was forced to shift its focus to delivering solutions and services to "second tier" cloud providers. But here too, companies that have never had a price advantage face pressure from ODMs.

HPE is adjusting the direction of its server business: instead of stimulating supplies, the company is more focused on additional benefits in its products in order to strengthen its competitiveness. This partly explains the drop in the vendor's natural performance.

By September 2018, Intel remains the largest manufacturer of server processors with a share of about 95%. With this dominance, the company can change the priorities of deliveries to partners in accordance with their sales volumes, rather than added value.

There have been several attempts by Qualcomm, AMD and to IBM undermine Intel's monopoly. HPE's efforts have also been noticed: the company is cooperating with the Ministry power engineering specialists USA in the development of supercomputer ARM processors. HPE's recommendations for using AMD products may well have been another attempt by the company to shake Intel's dominance.^[7]

Investing $4 billion in the smart Internet of Things

In June 2018, Hewlett Packard Enterprise (HPE) announced its intention to invest $4 billion in Intelligent Edge. This includes data analysis and solution development systems at sites where data is generated. Such technologies in the company are called the "smart" Internet of Things.

We will accelerate our R&D investments to promote and implement new products, services, and consumption patterns within Intelligent Edge in many areas including communications, security, edge computing, automation, machine learning, and artificial intelligence, HPE CEO Antonio Neri said at the HPE Discover 2018 conference in Las Vegas.

The direction of Intelligent Edge is closely related to borderline computing, which is distinguished by  the fact that data collection and analysis is carried out not  in a centralized computing environment such as a data center,  but in the place where data streams are generated. The data sources are digital devices (not necessarily located in the same location), which then transfer this data in real time to the central repository.

The $4 billion mentioned above will go to research and development in the field of security, artificial intelligence, machine learning, automation and border computing itself.

Antonio Neri identified two technologies that will play an important role in the first stage of the implementation of the new strategy. The first of these is the cloud-controlled software-defined WAN solution SD-Branch. It simplifies the deployment and management of all components of the network that connects HPE branches to the central office.

The second technology is a computing architecture using memory. It allows you to speed up the processing of data in edge devices.^[8]

Buying Plexxi

In mid-May 2018 HPE , it announced the purchase of a developer ON for, data centers Plexxi but did not name the acquisition cost. In 2016, investors valued Plexxi at $267 million following a funding round. More. here

Buying RedPixie

In April 2018, HPE announced a final agreement to buy cloud services consulting provider RedPixie. Read more here.

Purchase of Cape Networks

At the end of March 2018, Hewlett Packard Enterprise (HPE) announced the purchase of Wi-FiCape Networks, a developer of tools for controlling Wi-Fi networks . The cost of the acquisition was not disclosed. It is planned to close the deal until the beginning of April 2018. Read more here.

Restructuring - Hybrid IT

On February 23, 2018, it became known that Hewlett Packard Enterprise (HPE) had created a new structural division of Hybrid IT. This direction combines computing equipment for data centers, storage systems and network equipment. Hybrid IT was headed by HPE Sales Director Phil Davis.

According to the company's memo, which came to the disposal of CRN, the new division includes assets in the field of software and hardware, as well as various services. According to HPE CEO Antonio Neri, Hybrid IT will work on creating a software-based infrastructure and solutions that "will simplify the management of multi-cloud environments and local infrastructure."

Neri said the restructuring of the company is necessary to create innovative solutions in the field of Hybrid IT and Edge in accordance with the needs of customers.

The company has always strived to focus primarily on buyers, and new structural transformations will help it offer exactly those solutions in the field software and devices Internet of Things with elements of artificial intelligence that fully meet customer requirements, he added.

With the creation of Hybrid IT, HPE is expected to switch to a next-generation operating model that will help the vendor significantly increase profits.^[9]

This new operating model will strengthen the company's position, and I am sure that this is what we need to move to a fundamentally new level, "Neri said.

He also said that the president of the Intelligent Edge division will be Senior Vice President of HPE Aruba Kerti Melkote, and Irv Rothman will continue to work as the head of the financial services division of HPE.

2017

The fall in profit 9 times to $344 million; revenue decline by 6% to $28.9 billion

In fiscal 2017, HPE's revenue amounted to $28.9 billion, down 6% from the previous year. The indicators do not take into account the sold division of HP Enterprise Services. Taking into account its results in 2016, HPE's revenue exceeded $50 billion.

Net profit decreased by more than nine times - from $3.16 billion to $344 million. Such a large difference is due to the sale of a number of assets, including the Indian IT outsourcer Mphasis and network equipment manufacturer H3C Technologies, whose indicators were no longer taken into account in 2017. In addition, HPE incurred large restructuring costs.

According to the results of the 12-month reporting period, which ended on October 31, 2017 of the calendar year, the revenue of the Enterprise Group division, which includes IT equipment (servers, storage systems, network devices), turned out to be $26.2 billion, which is 6% less than a year ago.

Annual sales of HPE servers decreased by 8% to $12.7 billion. In the storage and network equipment segments, the company earned $3.1 and $2.5 billion, respectively, which is 3% and 11% less compared to the results of fiscal 2016. Revenues from IT services amounted to $7.9 billion, in fiscal year 2018 they will not be finally taken into account in the income of the American manufacturer, since this business was allocated and sold to Computer Sciences Corporation.

In fiscal 2017, financial services brought HPE revenue of $3.6 billion, which is 13% more than a year earlier.

Most of HPE 's revenue still comes from North and South America, where the company generated 42% of revenue in fiscal 2017. In EMEA countries (Europe, Middle East, Africa), the share was 35%, in the Asia-Pacific region (excluding Japan) - 23%. The company's turnover decreased in all these markets, and the strongest regression (by 7%) was recorded in the Asia-Pacific region.^[10]

For 2017, Hewlett Packard Enterprise's range of software products included solutions in the following areas:

• Managing the quality of business services
• IT Services and Project Portfolio Management;
• Data center automation and cloud platform building;
• Development and testing management
• Big Data, Analysis, and Management of Unstructured Information
• Data backup and recovery, archiving
• Managing security information and events
• Application security management and testing
• Data protection and encryption.

Directors lost bonuses

In early December 2017, it became known that the directors and ordinary employees of Hewlett Packard Enterprise (HPE) were left without bonuses due to the unsatisfactory financial results that the company demonstrates.

According to The Register, thousands of HPE employees were deprived of the premium, since the company was unable to fulfill the sales plan in fiscal year 2017. For the 12-month reporting period, the end of which fell on October 31, 2017, the vendor's revenue decreased by 6%.

The main divisions for the production of equipment showed a decline, and the business for the production of professional services recorded zero dynamics of income changes. What indicators the company was counting on, the publication does not specify.

In fiscal 2017, the performance in some business segments did not reach the planned ones, so bonuses in these divisions will not be paid, says an HPE representative. - In other segments that showed results at or above the target values, premiums were issued. Our employees play a crucial role in the success of the HPE, but we treat the company that pays for the results. It is very important for us that the rewards are fully consistent with our business results. It is worth noting that none of the senior executives received an annual bonus.

Antonio Neri, who will become CEO on February 1, 2018, set a salary of $1 million and assigned a salary bonus plus 150% for certain financial tasks.

The loss of bonuses will be a sore blow for employees who are already on edge amid a massive restructuring called HPE Next. This program involves a significant reduction in personnel costs, including travel and lunch.^[1]

Antonio Neri - new CEO

On November 21, 2017, Hewlett Packard Enterprise (HPE) CEO Meg Whitman announced her resignation after six years in charge of the American IT corporation. HPE President Antonio Neri will take her place on February 1, 2018 .

Elimination of management at EMEA level

In November 2017, HPE announced the elimination of one governing level in EMEA countries (Europe, Middle East, Africa). The positions of the company's sales executives in this region and the United States were eliminated, and Andy Isherwood and Jim Merritt, who occupied them, respectively, were fired. The duties of these already former top managers will be performed by Phil Davis, appointed global sales director of HPE. Read more here.

Entry into the market of blockchain services for business

Hewlett Packard Enterprise (HPE) helps large companies with cloud technologies, data centers and the Internet of Things, and in November 2017 Forbes magazine learned about the company's entry into the market of blockchain services for business.

As part of the blockchain-as-a-service (BaaS) model, HPE will offer corporate clients, including banks, the ability to use technology on a larger scale than popular blockchains bitcoin and, Ethereum which have limitations, allow.

The company announced that it will begin offering Distributed Ledger Technology (DLT) for mission-critical tasks from 2018 and will provide the necessary hardware to enterprise users looking to run their own blockchain operations or work with customers implementing blockchain in the cloud.

We believe that blockchain will become the same fundamental technology as the Internet, "Raphael Davison, HPE blockchain director, told the publication.

The top manager called Bitcoin "blockchain version 1.0" and noted that many companies and even central ones are interested in the technology, banks which are looking for effective ways to transfer money. Despite the interest, many are afraid to use it, as they are not sure about the reliability and safety of the technology.

According to Davison, HPE offers the next version, Blockchain 2.0, designed for cross-organization transactions.

In the case of bitcoin, the distributed register stores public information about all transactions made, which is problematic for companies that do not want to devote competitors to their transactions. The HPE solution, on the contrary, is based on the alternative blockchain platform Corda, developed by the R3 banking consortium, which allows you to save private information and allows parties to see transactions only with the permission of a partner.

Davison also noted that HPE is already working on Blockchain 3.0, which will connect blockchain and the Internet of Things.^[2]

Palo Alto headquarters sale

In early November 2017, Hewlett Packard Enterprise (HPE), in the midst of a large-scale restructuring program aimed at reducing $1.5 billion in costs over three years, announced the sale of its headquarters in Palo Alto (California, USA) and its transfer to a high-tech building in Santa Clara (also in California), where the headquarters of the subsidiary Aruba is located .

The 21,600 sqm-plus building, which Aruba moved into on January 1, 2017, was built as a showcase for the Cloud First and Intelligent Edge products the company is developing. This includes smart-connected Aruba developments for all six floors of the building, including geolocation services through a dedicated campus app.

The HPE said it plans to distribute about 1,000 employees of the Palo Alto headquarters to three facilities: Aruba headquarters, the HPE building in Milpitas and the San Jose office, which took over HPE earlier in 2017 along with the acquisition of storage manufacturer Nimble Storage. The HPE said it plans to complete the move by the end of 2018.

CRN notes that the sale of real estate in Palo Alto is directly related to the successful merger of the HPE Enterprise Services branch with Computer Sciences Corporation, which took place earlier in 2017, as a result of which DXC Technology was created, as well as the merger of the HPE software division with Micro Focus.

HPE said that even with the sale of its Palo Alto headquarters, the company will continue to work with HP Inc. to support the office of founders Bill Hewlett and Dave Packard, as well as the nearby Hewlett-Packard Garage, where Hewlett-Packard was founded.

Edge Solutions (HPE partner) president Michael Haley said the sale of the Palo Alto headquarters shows how HPE more cost-effective and flexible HPE has become an independent company.

Everything that HPE does makes the company more convenient to do business for both customers and partners. The difficulty is equal to the cost, "Haley noted.[3]

HPE stops selling cheap servers to large cloud customers

In October 2017, Hewlett-Packard Enterprise (HPE) announced its refusal to supply low-cost servers to large cloud providers like Microsoft and Amazon. The American IT Corporation decided to focus on the most profitable high-end equipment.

According to Fortune, citing HPE President Antonio Neri, the company is stopping selling "standard" servers commissioned by first-tier customers.^[4]

The representative of the vendor explained to the publication that such customers include Amazon, Google, Microsoft, Facebook, Apple, Tencent, Alibaba and Baidu. HPE intends to continue to cooperate with them, but supplying them with only highly profitable storage systems, network equipment, hyper-converged systems and servers.

The sale of standard servers brings very small margins and does not give the company the opportunity to provide services. Therefore, we are adjusting our strategy to reinvest these resources in solutions and services that will help increase profits, "Neri said.

It's unclear how many top cloud service operators are willing to buy more expensive servers or even other branded appliances when they can choose hardware specifications and produce them through non-brand manufacturers offering cheaper services, Fortune notes.

Moor Insights & Strategy analyst Patrick Moorhead suggests that among the largest server consumers, only Microsoft can do this. However, according to the expert, HPE and other manufacturers of proprietary servers still have many other customers: for example, second-tier cloud providers and telecommunications operators.

Antonio Neri attributed to second-tier customers,, and Dropbox eBay Salesforce.com some other companies building their business in. cloud

The business among cloud service providers of the second level is growing faster than among customers of the first, "said Moorhead.

In March 2017, HPE CEO Meg Whitman said the company was facing a "significant drop in demand" for servers from one leading customer. According to Bloomberg, then it was about Microsoft. In June, when HPE again recorded falling sales of low-cost servers, Whitman made it clear that the company should reconsider its position on this market.

In October 2017, the head of HPE announced HPE's refusal to operate in the cheap server market in order to focus on the most profitable systems.

HPE partners interviewed by CRN claim that the manufacturer's refusal to supply inexpensive servers to leading cloud providers will slightly affect the implementation of HPE servers through the channel, since the vendor offers various lines of equipment.

Hewlett-Packard entered the "standard" cloud server market in 2014 (before the company was split into HPE and) HP Inc. , starting a collaboration with a Taiwanese contract manufacturer electronic engineers Foxconn known primarily as a "screwdriver" mobile device assembler. Apple

Under Whitman's leadership, HPE continues to promote powerful server hardware whose sales generate a lot of profit for the company. However, the problem is that many large companies are increasingly refusing to purchase servers and disk storage located in their data centers, and prefer to place their data and applications in the public cloud.

This problem is not faced only by HPE. In 2014, IBM sold its Intel processor server business to Lenovo for $2.3 billion.

Halving the geography of presence

In October 2017, Hewlett Packard Enterprise (HPE) announced it was halving the geography of its presence. More than 80 countries in which the corporation operates do not bring it profit, and the revenue from them is negligible.

At the annual meeting with analysts on October 18, 2017, HPE President Antonio Neri said that the company is going to reduce the number of markets for its presence from 160 countries to 76, since these 76 states provide the vendor with 100% of profits and 99.5% of sales.

To date, we operate in more than 160 countries. It's too much, it's a legacy of our past HP computer and printer business. After HPE became a more focused company, our capabilities concentrated on fewer overseas markets... This will allow us to be more committed and shift our resources to areas where we see the highest returns for the company and shareholders. In the countries where we leave, business will develop only through a partner channel, - said Neri.

HPE is trimming its work area as part of the HPE Next restructuring program, announced in June 2017. Its goal is to concentrate the company on highly profitable services that allow you to increase profits, as well as reduce costs.

As part of the ongoing reforms, HPE redistributes resources. In particular, production operations are being reduced and research and development is being increased. By 2020, the company plans to reduce the number of its production facilities from 17 to 7.

It is assumed that HPE Next will allow the company to save about $1.5 billion. About half of that money will be reinvested in sales, operations and R&D, said Antonio Neri, who heads the program.^[5]

Reduction of 10% of the state

On September 22, 2017, it became known about mass layoffs at Hewlett Packard Enterprise (HPE). The Company reduces its headcount as part of a restructuring aimed at optimizing its operations and costs.

According to the Bloomberg news agency, HPE is going to cut at least 5 thousand people, which corresponds to about 10% of the state. Before the split of Hewlett-Packard into HPE and HP Inc. the corporation had about 350 thousand employees. After the separation, tens of thousands of working positions were liquidated in both companies, and several key divisions were also separated.

According to the agency, HPE workers both in the United States and in other countries will fall under the cuts. Among them will be not only ordinary employees, but also people in various leadership positions.

In June 2017, HPE announced a three-year restructuring program called Next. Its goal was to simplify the structure of the business (in particular, the company began to reduce the number of management levels) and also reduce costs. The company planned to reduce costs by $200-300 million in the second half of the financial year, which will end at the end of October 2017 calendar. In total, the Next project should save the IT vendor about $1.5 billion.

In fact, we are clearing the operating model and organizational structure to simplify our work, "said Meg Whitman, CEO of HPE, in September 2017.

The Wall Street Journal writes that the layoffs of employees became part of HPE's reaction to increased competition in the market and rising prices for components.^[6]

Creating a DXC Company

April 3, 2017|Hewlett Packard Enterprise announced the completion of the deal to separate the corporate IT services business and its merger with Computer Sciences. The asset combination created a new company called DXC Technology. Read more here.

Pointnext Departmental Plan

On March 7, 2017, it became known about Hewlett Packard Enterprise's intention to create a direction called Pointnext on the basis of the service unit. This initiative is part of the HPE strategy aimed at corporate customers.

The division's focus is on working with cloud systems, the Internet of Things, big data processing, as well as hybrid IT services and analytics. The Pointnext group was led by general manager Ana Pinchuk.

As part of Pointnext, the Operational Services team has been created, she will be responsible for developing methods for providing IT services through the management and optimization of workloads, resources and capacities within the local or cloud space. This will include a number of products and services like HPE Flexible Capacity and HPE Datacenter Care.

The company's project is provided by more than 25 thousand specialists from 80 countries of the world, offering support in 30 languages. HPE Pointext employees are responsible for helping customers with digital transformation. They will help the company's customers digitize their main operations, implement innovative projects to optimize the hybrid infrastructure.

HPE Pontnext will teach customers how to work with analytical tools, databases, teach how to work with intelligent devices, support in updating or developing enterprise applications with a focus on achieving results.

The service starts at the end of March 2017, when the company's merger with third-party service provider CSC is completed.

Buying Nimble Sorage for $1.09 billion.

On March 7, 2017, HPE announced the purchase of storage manufacturer Nimble Storage for $1.09 billion. With this deal, the buyer hopes to strengthen its position in the rapidly growing flash market. Read more here.

Buying SimpliVity for $650 million

On January 17, 2017, American IT solutions manufacturer Hewlett Packard Enterprise (HPE) announced the purchase of SimpliVity for $650 million. The cost of selling the manufacturer of equipment for data centers turned out to be six times less than the amount reported by the media, who learned earlier about the deal. Read more here.

2016

4% drop in revenue

On November 22, 2016, HP Enterprise published its first annual report as an independent company. The business of the American manufacturer of corporate IT equipment after the separation from Hewlett-Packard is reduced.

For the 12-month period, which ended on October 31, 2016, HP Enterprise's revenue amounted to $50.1 billion, which is 4% less than a year earlier. At the same time, net profit rose by 28.5%, reaching $3.16 billion.

In fiscal 2016, HP Enterprise Group, which develops and promotes servers, storage systems, network and other equipment, recorded a turnover of $27.2 billion against $27.9 billion a year earlier.

According to observers of The Wall Street Journal (WSJ), the server business, which brings HP Enterprise more than 40% of turnover, has two main problems. The first is this development of its own IT equipment by large potential customers such as Amazon.com and Google. The second is strong competition from Dell, which in the fall of 2016 absorbed the world's largest storage manufacturer EMC. According to IDC analysts, in the third quarter of 2016, Dell's share of the global server market grew by 2 percentage points compared to the same period in 2015, and HP Enterprise remained unchanged.^[7]

At the end of 2016, the direction of corporate IT services provided HP Enterprise with revenue of $18.9 billion, while in 2015, revenue was measured at $19.8 billion. The volume of software business for the year also decreased - from 3.6 to 3.2 billion dollars. Sales of financial services amounted to $3.2 billion.

WSJ notes that HP Enterprise's annual revenue will decrease from $50 billion to $30 billion, since in 2016 the company announced the separation of IT services and software development departments from itself, followed by their integration with competitors.

In the year after independence, HP Enterprise jumped 58% thanks to capital return programs to investors through dividend payments and share buybacks.^[8]

Sale of cloud assets to Suse

On November 30, 2016, the German manufacturer open source software Suse announced the acquisition of part of the Hewlett-Packard Enterprise (HPE) cloud business. Due to this transaction, the cost of which has not been disclosed, the buyer expects to accelerate revenue growth and master new markets.

Suse is buying HPE assets related to the OpenStack and Cloud Foundry cloud platforms. The latter, as well as other PaaS solutions, will form the basis of the corporate product Suse Cloud Foundry, addressed to partners and customers of the European company, its statement said.

Selling a business related to OpenStack and Cloud Foundry does not mean that HPE leaves the relevant market. The company will use these technologies being developed by Suse in its Helion OpenStack and Stackato solutions. As part of the agreement, Suse will become the preferred Open Source-partner HPE in Linux, OpenStack and Cloud Foundry.

The driver of this acquisition was a commitment to creating technologies for open software-defined infrastructures that are important for our customers and partners, comments Suse CEO Nils Brauckmann on the purchase of the HPE business. - In addition, the deal shows how we build our business through a combination of organic growth and technology acquisition.

According to Ric Lewis, senior vice president and head of HPE Software-Defined and Cloud Group, the Suse deal will allow the company to focus on developing a new generation of hybrid cloud solutions.

The sale of HPE's cloud assets was announced almost three months after the American vendor announced the merger of its software division with Micro Focus for $8.8 billion. Micro Focus owns Suse.^[9]

Hacking a laptop of an HPE employee led to a data leak of more than 134 thousand American sailors

At the end of October 2016, personal data of 134 thousand American sailors was leaked. This was reported on November 23 by Reuters, citing a statement by the United States naval forces.

The leak was due to the negligence of one of the employees of Hewlett Packard Enterprise Services (an IT contractor of the US Navy), whose laptop was hacked, which allowed attackers to steal data. The company notified the state customer about this at the end of October 2016. Read more here.

Software development division sold to Thoma Bravo for $9 billion

On September 2, 2016, it became known about HPE's plans to sell the software division of the investment company Thomas Bravo. The amount of the transaction ~ $8 - $10 billion.

Reuters linked the sale of the software division to a drop in its revenue. After the completion of the transaction, HPE Director Meg Whitman plans to focus the company's activities on network equipment, storage systems, data centers and related services. This is the second major separation of HPE assets since the 2015 separation from HP Inc^[10].

Investment bank Goldman Sachs has taken over the sale of HPE software assets. The highest price offered by the bank is $7.5 billion. Thoma Bravo doesn't mind paying more, despite a divergence from HPE's management in asset valuations. HPE's offers were made by Vista Equity Partners Management, Carlyle Group and TPG Capital. The media heard information, citing insiders, about the likely sale of the software division to another buyer or Thomas Bravo's offer of part of the assets.

Thoma Bravo is interested in buying the division, it owns several software development firms - Dynatrace and Compuware. This fact can facilitate the sale process. The leadership of Thomas Bravo believes that their software assets will work more efficiently in integration with HPE assets.

On September 2, 2016, after publications about HPE's likely plans, the share price rose by 4% to $22.16 apiece. The market value of the company as of this date ~ $36.8 billion.

The net revenue of the HPE software division in 2015 reached $6.3 billion, which is $0.3 billion less than in 2014. The company attributed the drop in revenue to a shift in market demand towards cloud technology.

HPE received part of its software assets with an acquisition Autonomy for $10.3 billion in 2011. Previously, in 2006, HPE bought Mercury Interactive for $4.5 billion. The large software assets of HPE include the analysis platform big data Vertica and, ArcSight it operates in the field of information security IT management.

SGI purchase for $275 million

On August 11, 2016, HPE announced the purchase of SGI. Through this transaction, the buyer plans to strengthen its position in the markets for analytics and supercomputer computing solutions.

The acquisition of SGI will cost HPE $275 million, which corresponds to $7.75 per share of the company being absorbed. The day before the SGI sale was announced, the company's securities were worth 30% less than the value of the deal. After HPE reported buying SGI, the latter jumped 29%. Read more here.

HP Enterprise Services merger with Computer Sciences

On May 24, 2016, Hewlett-Packard Enterprise (HPE) announced the separation of the IT services business and its transfer to Computer Sciences. Through the move, HPE intends to focus on cloud services and other fast-growing destinations. Read more here.

Sale of MphasiS for $1.1 billion

On April 4, 2016, Hewlett Packard Enterprise announced the sale of the company's IT outsourcer MphasiS. The value of the transaction will exceed $1 billion.

Hewlett Packard Enterprise is selling at least 84 per cent of its MphasiS shares to US investment firm Blackstone Group at Rs 430 apiece, equating to around $825 million. The remaining 16 per cent stake will be sold as part of a so-called compulsory tender offer. If approved, Blackstone will pay a total of about $1.1 billion for the purchase of MphasiS.

2015

Reduction of up to 30 thousand jobs

On September 16, 2015, HP announced plans to lay off a huge number of employees. This personnel purge will affect the company's corporate business.

On November 1, 2015, instead of one HP, two companies will operate on the market - HP Inc. (will focus on computers and printers) and Hewlett-Packard Enterprise (hardware, software and services for corporate clients). In the latter, mass reductions will take place.

As follows from the HP message, in Hewlett-Packard Enterprise the number of personnel will be reduced by 25-30 thousand people, which corresponds to about 10% of the staff of the future company.

Due to the restructuring, which is largely associated with the transformation of the business of corporate IT services (a division of HP Enterprise Services), it is planned to reduce annual costs by $2.7 billion, however, first the company will have to spend this amount on the procedure for eliminating work positions.

"These restructuring measures will allow the new Hewlett-Packard Enterprise to be more competitive and rationalize its spending structure," said HP President and CEO Meg Whitman, who will lead Hewlett-Packard Enterprise on November 1, 2015. "Over the past few years, we have done a huge amount of work to reduce costs and simplify business processes, and these last steps will eliminate the need for any corporate restructuring in the future."

Meg Whitman voiced a rather pessimistic forecast for the company's prospects. According to the top manager, the market for corporate IT solutions will grow by 4-5% per year, and the rise of HP will be less large and will approximately correspond to the growth of global GDP. Its head attributes the company's weak progress to difficulties in markets such as China, Brazil and Russia.

At the end of 2016, Hewlett-Packard Enterprise is expected to profit at $1.85-1.95 per share with free cash flow in the range from $2 billion to $2.2 billion. At least half of this amount is planned to be returned to investors in the form of dividends and share buybacks.^[11]

Start HP Enterprise Allocation (HPE)

On July 3, 2015, it became known that the official procedure for separating the Hewlett-Packard production unit into a separate independent company called HP Enterprise (HPE)^[12]

The company has filed USA a Form 10 application with The United States Securities and Exchange Commission (SEC) explaining the financial performance of the division being transformed into HPE over the past several years.

2014

Financial results

According to the published data, in 2014, HPE's profit amounted to $1.6 billion, revenue - $55.1 billion. In 2013 - $2.1 billion and $57.4 billion, respectively.

Bloomberg experts drew attention to HPE's debt - $1.45 billion by April 30, 2015. HP's total long-term and short-term loans and borrowings reached $21.6 billion. It turns out that most of the debt obligations are related to HP Inc. The data on this company is not made public in the SEC documents, since it, unlike HPE, is not created by separation from the main legal entity. It was announced that the financial performance of the HP Inc. business will become public after the separation procedure, that is, after November 1, 2015.

Announcement of HP's division into Hewlett-Packard Enterprise and HP Inc.

On October 6, 2014, Hewlett-Packard officially confirmed plans to split the assets into two public companies.

• HP Enterprise () HPE - infrastructure business, development ON and services;
• HP Inc is the heiress of the PC and printer manufacturing business, and will retain the right to use the current HP logo.

The separation of assets should be completed before the end of fiscal year 2015 - October 31, 2015 at Hewlett-Packard. After the split, Hewlett-Packard shareholders are expected to receive shares in both Hewlett-Packard Enterprise and HP Inc.

On November 1, 2015, one company will turn into two - Hewlett-Packard Enterprise and HP Inc., in the process of which the changes will affect 2,800 applications and 75 thousand application programming interfaces.

HP Enterprise will work with data center products such as servers, storage devices, network equipment and software, and enterprise services. The Machine product based on memristors will also be developed here, the working prototype should be shown next year.

Meg Whitman, President and CEO of HP, along with HP CFO Cathie Lesjak, will move to similar positions at Hewlett-Packard Enterprise.

1939-2014: Creation and development of Hewlett-Packard (HP)

Шаблон:Main 'Hewlett-Packard (HP) History

The history of HP, one of the largest American corporations in the information technology market, is a classic example of a business created in a garage that has reached a truly global size.

See also

• Hewlett-Packard (HP)
• History of Hewlett-Packard (HP)

Notes