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Must-know: Will HP’s restructuring initiatives yield results?
Apart from the PC market, HP leads in the server market. In the total worldwide disk storage systems market for 4Q13, HP retained the second position with a market share of 16.3%. It was behind EMC (EMC). EMC held 25.8% of the market share, according to the International Data Corporation (or IDC).
As of July 30, 2014, HP generated a FCF of $1.88 billion. It holds cash reserves worth $14.5 billion. It has a total debt of $ 19.8 billion. By launching several new offerings in cloud, server, storage, and “big data,” HP has clearly stated its intent to focus on these rapidly growing areas. HP hasn’t shown any significant growth in revenues, yet. However, its bottom line and cash flows are improving.
Unlike its peers, Hewlett-Packard (or HP) (HPQ) has paid dividends since 1965. Along with raising the dividend payments, HP has been very consistent in making the dividend payments. SPDR MS Technology (MTK) is the exchange-traded fund (or ETF) that will benefit from HP’s dividend announcement.
Social, mobile, analytics, and cloud (or SMAC) is a disruptive technology that’s transforming the current IT environment at a rapid pace. Many technology leaders, who failed to acknowledge its importance or were slow in embracing it, are suffering. HP has been impacted by SMAC.
The advent and adoption of social, mobile, analytics and cloud (or SMAC) is changing the IT environment. It’s urging organizations to transform their strategy in order to stay competitive. In 2014, Hewlett-Packard (or HP) (HPQ)—like its peers, IBM (IBM) and Microsoft (MSFT)—announced its plans to invest more than $1 billion over the next two years into cloud-related products, solutions, and initiatives.
All the legacy vendors want a slice of this rapidly growing phenomenon. Demand for data storage is expected to increase. This is why legacy players are pouring funds into “big data” appliances. They’re adopting new technologies to harness “big data” growth through billion dollar investments and acquisitions.
Information Technology (or IT) is an industry that’s driven by knowledge. Companies enter into joint ventures and partnerships to share ideas, customers, technologies, and geographical presence. According to the International Data Corporation (or IDC), the expenditure on public IT cloud services is expected to reach $107 billion by 2017.
Hewlett-Packard (or HP) (HPQ) has held the title of “x86 server market leader” for the last 16 years, according to the International Data Corporation (or IDC). It has launched Commercial UNIX server, HP 9000 Series 840, first x86 server, and HP SystemPro successfully over the years.
In the personal computer (or PC) space, Hewlett-Packard (or HP) (HPQ) doesn’t need an introduction. For the first time since 2011, there was an increase in PC sales by 12% in 3Q14. The increase was instrumental for revenue growth, even though it was nominal at 1%. Personal systems—including notebooks, desktops, and workstations—account for ~30% of HP’s revenues.
In 2011, Hewlett-Packard (or HP) (HPQ) launched HP P10000 3PAR Storage Systems, in accordance with its Software defined storage strategy. When it was built, it kept the enterprise-class virtual and cloud-based data centers in mind. This move was achieved through HP’s acquisition of 3PAR—a leading global provider of utility storage—in September 2010 for $2.35 billion.
Hewlett-Packard’s (or HP) (HPQ) Enterprise Service segment includes data center management, IT security, cloud computing, workplace technology, networks, unified communications, and enterprise service management. The technology services division focuses on helping organizations improve their IT operations and transition to new technologies like virtualization, cloud computing, and converged Infrastructure.
Hewlett-Packard (or HP) (HPQ) is an established brand in the peripherals and computing industry. The International Data Corporation (or IDC) stated that the worldwide hardcopy peripherals market—that includes printers, multi-function printers, and digital copiers—was worth 122 million units in 2013. HP led the worldwide hardcopy peripherals market.
As a part of its restructuring plan, HP wants to simplify its organizational structure. This would facilitate innovation, improved decision making, and cost reduction. This would benefit HP in the long term. To achieve long-term growth, HP has identified key growth areas in various operating segments.
Hewlett-Packard (or HP) (HPQ) was founded in 1939. It’s one of the leading players in the personal computers (or PC) market. It provides PCs, printers, enterprise server and storage technology, software, and related products and services to individual and enterprise customers around the world.
The previous parts of this series (parts 8 and 9) explained the counterintuitive relationship between low natural gas prices, falling rigs, and rising natural gas production. Oil rigs have a simpler relationship with crude oil prices and oil production.
Natural gas liquids (or NGLs) are hydrocarbons that are produced when “wet natural gas” (primarily methane and condensable heavier hydrocarbons) is processed in natural gas plants.
The U.S. Energy Information Administration (or EIA)—in its Short-Term Energy Outlook (or STEO) released in August 2014—reported that dry natural gas production is expected to total 69.6 billion cubic feet (or bcf) per day for 2Q14.
The U.S. natural rig count was up by eight rigs—from 330 to 338—during the week ended August 29. Most of the increase occurred in the Marcellus Shale, which added five rigs.
Last week, the Baker Hughes oil rig count increased by 11. It rose to 1,575 from 1,564. The addition was driven by the Mississippian (+3), Eagle Ford (+3), and Permian (+2) plays.
Out of the current 1,575 oil rigs at work, the majority—roughly 552—are in the Permian Basin. The Eagle Ford has 196 rigs, the Williston and Bakken have 192 rigs, and the Mississippian has 79 rigs.