Hewlett-Packard Company (HPQ)

For the coming fiscal year, HP expects annual revenues to be between $113.5 and $114 billion compared to market expectations of $112 billion. Sequentially, Q2 revenue outlook of $27.7 to $27.9 billion is higher than market expectations of $27.5 billion.

HP has been focusing on building its presence in emerging markets. This is evident in its current quarter's results. Forty percent of the revenues were from U.S. markets, 43% from EMEA (Europe, the Middle East and Africa), and 17% from Asia Pacific. In the previous year, the Americas contributed 41%, EMEA 43%, and Asia Pacific 16%. Year-on-year, the highest growth was reported in the Asia Pacific segment with 22%, followed by EMEA growth of 15% and America’s 8%.^[1]

Hewlett-Packard Co. (HPQ) reported fiscal third-quarter 14% jump in profit that thrashed Wall Street expectations. HP said it earned $2.03 billion, or 80 cents per share, in the latest period, up from $1.78 billion, or 66 cents per share, a year earlier. Excluding one-time charges, HP’s profit was 86 cents per share, three cents higher than the average estimate of analysts polled by Thomson Reuters.

Recognizing the commoditization of the PC business, HP has acquired EDS to broaden its business into the lucrative IT consulting space. Once integrated, the EDS business will drive further share growth for HP's computers and servers, and HP's customers will have access to broader portfolio of consulting services from a single vendor. This is likely to substantially increase the gross operating margin of HP.

With this merger, the IT/business transformation second-source in the global market is alive and well. There's always this: The better IBM does, the more need there is for an alternative. HP with EDS has now clearly staked its future on the top prize in IT: next-generation IT operations efficiency, proper outsourcing methods, cloud computing services management, and high-level consulting as the onramp. This amounts to business transformation via IT transformation via IT multi-sourcing.

HP's services units have been diligent about establishing meta methods that allow for both efficiency improvements, and transformation. HP's software and hardware units have been diligent about business technology optimization [BTO] and high-efficiency/high-availability computing. HP's acquisitions have given it an arsenal through which to operate data centers at peak efficiency and top operational integrity.

Adding EDS to the mix to tackle the definition of and implementation of the missing methodologies to take IT functionally to a multi-source level that actually enables businesses at the strategic level seems a very strong fit indeed.

HP is the worldwide leader in IT products and services and has shown consistent growth in recent years through organic growth and acquisitions and will continue to follow this successful practice in the future.

Hewlett-Packard (HPQ) and VMWare (VMW) announced a deeper product collaboration going forward, offering to enterprises and service providers a single management and control approach to both physical and virtual software infrastructure stacks.

Both the HP Discovery and Dependency Mapping products and HP Universal CMDB configuration data management suite will aid in discovery of virtualized environments for improved tracking and reporting of changes in VMWare virtualized envrionments.

And HP's Business Service Automation capabilities -- including HP Server Automation Center, HP Client Automation and HP Operations Orchestration -- will assist in the oversight and operational upkeep of services running in VMWare-supported virtual infrastructure instances.

HP and VMWare did not unveil any financial partnership news, but the two certainly seem chummy these days. HP clearly sees a huge market opportunity for helping to manage the complexity of virtualized platforms, given the need for enterprises to cut total costs through higher hardware utilization and the ability to dynamically and automatically match computer power supply with applications and storage demand.

The two companies did outline bundling and packaging of their products, in that new software bundles will combine VMware's Infrastructure 3 software suite with the HP Insight Control Environment for additional automation benefits. The goal, said the companies, is to provide a "comprehensive and seamless physical and virtual platform management" capability set.

“We’re expanding our relationship with VMware to jointly develop solutions that provide customers with comprehensive management of virtualized business applications running on the VMware platform,” said Ben Horowitz, vice president and general manager, of HP's Business Technology Optimization software, in a release

The printing market is highly profitable and HP is the leader in this market; HP will continue to grow its Imaging and Printing segment which will continue to significantly add to total profits.

Mr Hurd has proven to be a CEO ruthlessly dedicated to cost cutting and improving operation. Since his arrival in 2005, he has focused on expanding HP's business in all direction. This dedication has turned HP into an extremely effective, lean, and strong business.

1/3rd of revenues are recurring in nature