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Behind Hewlett Packard Enterprise's Fiscal 3Q17 Performance

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Part 6
Behind Hewlett Packard Enterprise's Fiscal 3Q17 Performance PART 6 OF 10

Why HPE Next Is so Important to Hewlett Packard Enterprise

HPE Next announced in fiscal 3Q17

In this series, we’ve discussed how Hewlett Packard Enterprise (HPE) has become a smaller company by focusing on spin-offs and divestitures. HPE’s primary focus is to make hybrid IT (information technology) simple for businesses. The company believes that a smaller and leaner organization will help it reach strategic goals and objectives faster, driven by a more efficient operating model.

In June 2017, HPE announced HPE Next, which is expected to help the firm compete in the global market.

Why HPE Next Is so Important to Hewlett Packard Enterprise

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During the company’s fiscal 3Q17 earnings call, CEO (chief executive officer) Meg Whitman stated the following: “We are clean sheeting the operating model and organization structure to simplify how we work. We are improving core business processes to clarify accountabilities and make the company more efficient and effective.”

Operational efficiency to remain primary focus

HPE wants to improve operational efficiency. While its revenues in fiscal 2Q17 fell 13%, its EPS (earnings per share) fell 24% YoY (year-over-year). Similarly, although revenues rose 3% YoY in fiscal 3Q17, EPS fell 22.5%.

HPE Next is expected to simplify customer engagement, sales compensation, and order processing. HPE is thus shifting its resources in regions where it generates maximum revenues.

HPE also announced that it will use $200 million in fiscal 4Q17 to enable the HPE Next program. HPE will also fund the program by real estate sales and lower-than-expected separation costs. Notably, HPE recently sold its Roseville site for $100 million.

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