Enterprise networking major HPE announced significant improvement in its revenue in its fiscal 2018 first quarter, ended January 31, 2018.
HPE’s first quarter revenue rose 9 percent to $7.7 billion. “Our strong Q1 performance is proof that we have the right strategy and improved execution,” said Antonio Neri, president and CEO of HPE.
HPE has generated revenue of $6.3 billion (+9 percent) from Hybrid IT, with 9.6 percent operating margin – supported by revenue growth in compute (+10 percent), Storage (+23 percent), DC Networking revenue (+25 percent) and Pointnext (flat).
HPE revenue from Intelligent Edge was $620 million (+7 percent), with 2.9 percent operating margin – fuelled by HPE Aruba Product (+7 percent) and HPE Aruba Services (+6 percent) in the first quarter.
HPE Financial Services revenue was $888 million, registering a growth of 5 percent, with an operating margin of 8.1 percent.
HPE recent client wins
Wellington Management, an independent investment management firms, purchased mobility access switches and Aruba ClearPass for secure network access control.
Royal Dutch Shell selected Aruba wireless LAN for their new wireless standard worldwide.
U.S. Department of Defense tapped HPE for supercomputers that will support research including hypersonics and computational modeling of current and advanced air, naval, and ground weapon systems.
Ajax, a football club in the Netherlands, is using HPE network and storage to analyze player performance in real time through artificial intelligence.
HPE challenges
A restructuring of HPE’s business units took effect in Q4 2017 and is reflected in HPE’s financial reporting for the quarter. “These shifts better align HPE’s portfolio to the demands customers are bringing to the vendor, as business units are now aligned more closely around business outcomes, such as hybrid IT, rather than technology type,” TBR analyst Stephanie Long said.
HPE announced plans to cut 10 percent of its workforce in September 2017. On top of these reductions, some of HPE’s executives have left for rival companies. HPE channel executive Robert Vrij left the company to join Lenovo as senior vice president and president of EMEA. TBR said headcount shifts may pose a challenge to HPE in the near term.
