HP ends single-company status with revenue, profit declines

By Stephen Belanger, Analyst

HP’s earnings results from its last quarter as a single company underscore its need to realign around changes in the global PC and data center markets. Personal Systems was pressured by extended PC life cycles and weak global demand for traditional notebook and desktop PCs. Meanwhile, HP’s Enterprise Group (EG) was challenged by low competitor pricing, hardware commoditization and rising adoption of public cloud solutions for a wider range of workloads. Combined, these factors caused HP’s corporate revenue to decline 9.5% year-to-year to $25.7 billion in 3Q15. Continue reading

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During 2016, HP Software will provide strategic direction and ‘anchor IP’ for HPE’s transformational focus areas

By Andrew Smith, Analyst

HP Software’s revenue declined 7% year-to-year to $958 million during CY3Q15 (FY4Q15). At the corporate level, revenue declined 9% year-to-year to $25.7 billion. License erosion continues to inhibit the growth of HPE’s Software business. The vendor reported a 6% year-to-year decline of software license revenue. SaaS revenue shrank 2% year-to-year. On a positive note, key products within the HP Software portfolio did grow, with double-digit year-to-year growth reported in its Big Data segment and year-to-year license revenue growth of over 50% for Vertica. However, overall revenue declines will force HP Software to focus on cost control and portfolio consolidation for the foreseeable future. HP Software will work to preserve its 30% operating margin moving into FY16 with ongoing efficiency and headcount reductions measures. In September, HP announced it would lay off approximately 30,000 employees as part of the corporate split into HP Inc. and HP Enterprise (HPE). Continue reading

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HP Services revenues continue to be pressured, but margin improvements indicate early success in its transformation

By Kevin Collupy, Research Analyst

Adapting HP Services business model to the New Style of Business will take time to develop, pressuring revenues in the near term

As revenues continue to erode, Hewlett-Packard Enterprise (HPE)’s profitability during 2016 will illustrate the success and speed of its transformation. As HPE cuts costs with automation and low-value account runoff, we expect continued investments in R&D and IP to deliver business outcomes to its clients in what it coins the New Style of Business. Continue reading

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Palo Alto Networks delivered another strong quarter by betting on SaaS and SECaaS

By Jane Wright, Engagement Manager & Senior Analyst

TBR assessment

Palo Alto Networks’ platform based on its flagship firewalls and WildFire subscriptions provided another strong set of financial results in 3Q15. As customers increased spending on purpose-built network security devices to detect known and unknown threats, the vendor’s revenue grew 55% year-to-year to $297.2 million. This was its sixth consecutive quarter of revenue growth between 50% and 60%, so its success cannot be attributed simply to a small base. With a portfolio strategy focused on advanced threat detection and a competitive strategy to differentiate from Cisco and Check Point, Palo Alto Networks is effectively capturing new customer spending and displacing competitors to grow revenue faster than its peers. Continue reading

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HP faces another quarter of financial declines in its last quarter as a single company

By Stephen Belanger, Analyst

As separate entities, HP Inc. and Hewlett Packard Enterprise are better positioned to address changes in the PC and data center markets

During HP’s CY3Q15 (FY4Q15) earnings announcement on Nov. 24, TBR expects the vendor will report a revenue decline of 5.8% year-to-year to $26.8 billion. In its last quarter as a single company, TBR expects only HP’s Enterprise Group (EG) business segment will achieve year-to-year revenue growth, rising 0.8% to $7.3 billion. HP continues to drive sales growth from its core industry-standard server business; however, the company’s challenges expanding from its legacy as a point-product vendor to an IT solutions provider will hinder its 3Q15 EG revenue performance. Continue reading

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TBR Event Perspective: With partners’ help, SAP can execute SMEs’ digital transformations

By Kelsey Mason (Kelsey.mason@tbri.com), Analyst

TBR perspective

SAP’s fourth annual SME Summit honed in on the struggles small and midsize enterprises (SMEs) face and the benefits a digital transformation can provide — with SAP’s assistance — as these companies grow into larger enterprises. Though at a much smaller scale, SMEs share many of the same complexity challenges as large enterprises, and SAP can bring its knowledge of these complexities to the table in engagements with SMEs. The overarching theme of the summit was consistent with SAP’s messaging over the last year and a half: Simplify. TBR believes SAP has the right messages and portfolios in place to attract SME customers but lacks widespread mindshare in the segment, despite citing more than 80% of its customer base comprises SMEs. Continue reading

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54% of global enterprise respondents report using public cloud services, a market poised to reach $133B by 2018

HAMPTON, N.H. (Nov. 23, 2015) — According to Technology Business Research Inc.’s (TBR) Public Cloud Customer Research, over half of global enterprise market respondents report using public cloud services. TBR’s Public Cloud Customer Research examines the buying decisions of enterprise cloud adopters and provides insight for vendors looking to improve their product adoption rates. Report findings indicate vendors offering built-in integrations for cloud and on-premises applications are best positioned to capture new customers, and hybrid IT, brokerage and geographic expansion will support and sustain public cloud adoption. Continue reading

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