Editor’s note: Hewlett Packard Enterprise reports a 3 percent bump in revenues but Technology Business Research Analyst Stephanie Long says work remains for the tech giant to succeed “in an increasingly commoditizing infrastructure market.”
HAMPTON, N.H. – In CY2Q17, Hewlett Packard Enterprise achieved $8.2 billion in revenue, an increase of 3% year-to-year as reported on Tuesday.
TBR believes this can be attributed to HPE’s efforts in laying the groundwork for success, as it finalized the spin-merges of many of its software assets and Enterprise Services (ES), while making strategic acquisitions including that of Niara, SimpliVity, Nimble, and most recently, the pending acquisition of Cloud Technology Partners (CTP).
TBR notes, that although progress is being made, HPE still has work to do from a profitability standpoint, as the vendor experienced margin declines year-to-year in an increasingly commoditizing infrastructure market.
From an infrastructure perspective, TBR believes recent acquisitions have reinforced positive performance for Enterprise Group (EG), as storage and networking increased revenue year-to-year and EG achieved an operating margin of 9.3% in the quarter.
TBR notes that this positive revenue performance is counter to market trends, and is largely due to inorganic revenue increases from acquisitions. Storage revenue increases were due in part to 30% year-to-year gains in its all-flash portfolio, which includes Nimble Storage assets while HPE’s networking business continues to reap the positive rewards of its Aruba business, reinforced by its Niara buy.
HPE’s server business was hindered by ongoing declines in tier-1 sales, but this was partially offset by increases in blade server sales, resulting in 1% year-to-year revenue declines for the quarter.
HPE noted on its earning call that the increases in blade server sales are due in part to customers purchasing blades to become “synergy ready.”