HPE revenue indicates strong come back against Cisco, IBM

Hewlett Packard Enterprise Hanover Street
The revenue performance of Hewlett Packard Enterprise (HPE) during its fiscal 2016 second quarter, ended April 30, 2016, indicates revival of the networking company.

Second quarter net revenue of HPE increased 1 percent to $12.7 billion.

The businesses comprising HPE grew revenue over the prior-year period on an as reported basis for the first time in five years.

HPE in a statement said it has generated $7 billion (+7 percent) from Enterprise Group, $4.7 billion (–2 percent) from Enterprise Services, $774 million (–13 percent) from Software and $788 million (–2 percent) from Financial Services.

Within Enterprise Group, HPE’s server revenue was up 7 percent, Storage revenue was up 2 percent, Networking revenue was up 57 percent, and Technology Services revenue was down 6 percent.

Within Enterprise Services business, HPE’s Infrastructure Technology Outsourcing revenue was down 1 percent, and Application and Business Services revenue was down 3 percent.

Within Software business, HPE’s License revenue was down 12 percent, support revenue was down 16 percent, professional services revenue was down 3 percent, and software-as-a-service (SaaS) revenue was down 11 percent.

“Today’s results represent our best performance since I joined in 2011,” said Meg Whitman, president and chief executive officer of Hewlett Packard Enterprise.

According to HPE CEO Meg Whitman, HPE claims that it is the only major vendor to gain share in external disk storage over the last two years, while EMC, NetApp, IBM and Dell lost share. Revenue in HPE’s 3PAR all-flash business grew nearly triple digits, about two times faster than the market.

HPE is seeing acceleration of business in networking, after the acquisition of Aruba and partnership with Unisplendour, a subsidiary of Tsinghua in China.

“Our results are in stark contrast with the results Cisco reported last week. In switching, HPE grew 18 percent versus Cisco that was down 3 percent,” said HPE CEO Meg Whitman.

HPE grabbed the leading position in Gartner’s most recent Magic Quadrant for Wired and Wireless offsetting Cisco’s long standing run in the top five.

HPE said it posted revenue growth in constant currency in every region and outright growth in the Americas and Asia Pacific Japan.

HPE’s performance in Americas continues to support cautious optimism for the remainder of the year. HPE faces currency related challenges in EMEA. Networking drove strong performance in China. Meg Whitman did not mention about the revenue performance of HPE in India.

HPE recently won a contract from Woolworths, Australia’s largest retail company. The HPE solution, based on the ConvergedSystem 900 for SAP HANA provides access to real time data, enabling critical business decisions.

“This win against Lenovo, Fujitsu and Dimension Data with Cisco UCS displays as the current outsource provider with pro and further secures HPE’s relationship with Woolworths,” said Meg Whitman.

HPE’s Enterprise Services recently bagged a 10-year $0.5 billion contract to provide IT services including infrastructure, mission critical systems, and applications to the U.S. Strategic Command.

Baburajan K

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