Revenue fell 12% YoY
Hewlett Packard Enterprise’s (HPE) Enterprise Group revenue was $6.3 billion in fiscal 1Q17, a fall of 12% YoY (year-over-year). Its revenue fell 6% YoY after adjusting for currency fluctuations and divestitures. The operating margin for this business segment was 12.7%. In this segment, server revenue fell 12%, storage revenue fell 13%, networking revenue fell 33%, and technology services revenue fell 2% YoY in fiscal 1Q17.
Profit margins in HPE’s Enterprise Group fell in fiscal 1Q17 after having steadily improved over the last two quarters. The operating margin of the enterprise business was 11.7% in fiscal 2Q16, 8% in fiscal 3Q16, and 13.2% in fiscal 4Q16.
HPE had earlier stated that it is confident that cost savings and product mixes in software-defined solutions, storage, and networking will offset falling demand for core servers in the long term.
During the company’s fiscal 1Q17 earnings call, chief executive officer Meg Whitman said, “In the Enterprise Group, I was very pleased with our focus on the critical, higher margin, higher market growth areas of the portfolio that will be the foundation of our future success.”
Enterprise Group streamlined
In 2016, Meg Whitman, the company’s CEO, stated that its Enterprise Group businesses had been streamlined. The company plans to consolidate all corporate marketing and sales efforts under a single marketing function. The company announced that Hewlett-Packard Labs will integrate with the Enterprise Group business, helping the company to better align its research activities.
HPE has appointed a new Global Sales head in each of its geographical regions. The firm also hired a new Technology Services business leader.