Could Hewlett Packard Enterprise Beat Analyst Estimates in 4Q17?

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Part 8
Could Hewlett Packard Enterprise Beat Analyst Estimates in 4Q17? PART 8 OF 11

An Overview of HPE Pointnext’s Core Strategies

Maintaining operational services

Hewlett Packard Enterprise (HPE) launched HPE Pointnext earlier this year to simplify the process of digital transformation in companies. Pointnext’s Operational Services revenue accounted for approximately $6 billion in fiscal 2017. HPE wants to grow its share of this space by delivering competitive operational services and expanding its installed base. HPE is looking to improve margins in this vertical through automation and simplification.

An Overview of HPE Pointnext&#8217;s Core Strategies

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Advisory and professional services

One of HPE’s key strategies is to lead with profitable advisory and professional services. This vertical generated revenue of $1 billion in fiscal 2017 and rose 8% YoY (year-over-year). HPE aims to deliver a focused portfolio for hybrid IT, data, and analytics. The company wants to expand high-margin subscription and packaged services as well as expand cloud service offerings through the acquisition of CTP (Cloud Technology Partners).

In September 2017, HPE acquired CTP for an undisclosed amount. HPE believes this acquisition could strengthen its cloud consulting capabilities. CTP advises enterprises on the best cloud technology solutions based on client requirements. Companies can choose a variety of cloud solutions provided by technology giants such as Amazon (AMZN), Alphabet (GOOG) (GOOGL), and Microsoft (MSFT). CTP helps clients navigate and set up the appropriate cloud infrastructure.

Grow new solutions and business models

As shown in the above presentation, HPE is focused on growing its recurring revenue stream by delivering high-value client outcomes. HPE has expanded customer offerings, leading to the generation of new revenue streams.


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