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Enterprise Portfolio Drives Customer Traction for HPE

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Multiyear agreement with JBS

Hewlett Packard Enterprise (HPE) recently signed a multiyear agreement with JBS, one of the world’s largest food producers. HPE will help JBS build an IT environment to support faster business expansion that includes consolidation of data centers and transition to cloud. Last month at the Mobile World Congress, HPE announced that Swisscom, which is Switzerland’s leading telecom provider, will deploy new virtual network functions using HPE OpenNFV solutions.

HPE’s enterprise portfolio is one of the best and has been driving strong customer traction in the last few years. HPE is the leading infrastructure provider of SAP HANA (SAP) (high-performance analytic appliance) with almost twice the shipments over the next competitor.

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In fiscal 1Q16, HPE won a number of important deals including one with Canadian telecom firm Rogers (RCI). HPE will transform Rogers’ existing traditional IT to a hybrid infrastructure and provide a comprehensive solution that includes converged systems, cloud systems, StoreOnce, 3PAR all-flash, and technology services.

Revenues from the enterprise group rose 1% in fiscal 1Q16

The revenue from HPE’s Enterprise Group business rose 1% YoY (year-over-year) in fiscal 1Q16 to $7.1 billion. It rose 7% YoY on a constant currency basis. It had an operating profit of $944 million, or 13.4% of the revenue. In the Enterprise Group, the server revenue fell 1% YoY, the storage revenue fell 3% YoY, the networking revenue rose 54% YoY, and the technology services revenue fell 9% YoY in fiscal 1Q16.

The revenue from HPE’s Enterprise Services business fell 6% YoY in fiscal 1Q16 to $4.7 billion. It reported an operating profit of $238 million, or 5.1% of the revenue. In the Enterprise Services segment, the infrastructure technology outsourcing revenue fell 8% YoY. The Application and Business Services’ revenue fell 3% YoY in fiscal 1Q16.

HPE accounts for 2.3% of the First Trust ISE Cloud Computing Index ETF (SKYY). The other top holdings in this ETF include EMC (EMC), Google (GOOG), and Facebook (FB). They account for 4.1%, 4%, and 3.9%, respectively, of SKYY.

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