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For Hewlett Packard Enterprise, Hybrid IT Revenue Rose 7%

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Revenue of $6 billion

Hybrid IT is Hewlett Packard Enterprise’s (HPE) largest segment. It accounted for 80% of the company’s revenue in its fiscal second quarter. The segment’s revenue was $6 billion, a 7% rise YoY (year-over-year). Its revenue growth was driven by solid performances across all its business verticals.

HPE’s High-Performance Computing revenue rose 6% YoY and rose 9% after excluding Tier 1 customers. HPE experienced strong growth in Composable Infrastructure, High-Performance Computing, and Hyper-Converged Infrastructure. Growth in these verticals was offset by a continued decline in commodity server sales to Tier 1 vendors. HPE stated that it’s moving away from this business and focusing on its high-growth, high-margin market segments.

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HPE is now focusing on providing different solutions to customers, which could drive the company’s profitability. In our pre-earnings report on HPE, we saw that it acquired Plexxi, a data center SDN (software-defined networking) company for an undisclosed sum. The acquisition could help HPE integrate SimpliVity, its hyper-converged offering, and Synergy, a composable infrastructure offering.

The acquisition could help customers manage data efficiently and reduce capex and opex (operational expenditure) by up to 50% in some cases, as estimated by HPE.

Storage revenue rose 24% YoY

HPE’s storage revenue in its fiscal second quarter rose 24% YoY, driven by the Nimble acquisition. Excluding this acquisition, its revenue rose 14% organically. All-flash revenue continued to rise 20% YoY in the quarter. In May, HPE introduced a next-generation Nimble Storage platform. Its data center networking revenue rose 2% YoY in the fiscal second quarter.

HPE Pointnext had revenue growth of 1% YoY in the second quarter. HPE’s latest offering, HPE GreenLake, gained customer traction in the quarter. The service consists of pay-per-use solutions available for customer workloads, including Big Data, Sap Hana, and Edge Computing.

HPE continued to strengthen its advisory capabilities by leveraging the acquisition of RedPixie, a UK-based cloud consulting company. RedPixie has deep Microsoft Azure (MSFT) expertise. According to HPE’s CEO Antonio Neri, “RedPixie is a UK-based cloud consulting company with deep Microsoft Azure expertise, which perfectly complements CTPs strong AWS relationship. We are excited about the capabilities these two acquisitions bring to HPE and are already seeing them open doors to new and bigger deals.”

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