HP: Will customers 'Discover' more of a master plan?

HP: Will customers 'Discover' more of a master plan?

Summary: Ahead of Hewlett-Packard's Discover conference there are multiple questions about the company. HP is stable for sure, but still has to navigate some key innovation curves.

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Hewlett-Packard will hold court for business tech pros and a lot of the questions will revolve around the company's strategy, innovation pipeline, and narrative.

The company's Discover conference, held in Las Vegas this week, is likely to feature a bevy of hardware and software announcements. But a second quarter that disappointed some, and job cuts ahead, highlight the challenges HP faces to pivot to next-gen technologies and cloud computing.

Here's a look at the big questions surrounding HP going into its Discover conference:

Enterprise giants and cloud computing: What's cloudwashing vs. real DNA change?

What's the narrative? Last month, HP reported a second quarter that left a lot to be desired. The big news was that HP will cut headcount by another 11,000 to 16,000. Wall Street liked the move since it boosted profit margins, but HP can't cut its way to prosperity forever. HP has some good stories to tell — Moonshot for instance — but many analysts say the company is too tethered to commodity products. Indeed, servers, PCs, networking, and storage are all facing pressure from virtualization and cloud computing. HP needs to build a narrative around innovation and big moves.

Cantor Fitzgerald analyst Brian White said "we continue to question the company's competitive position with a portfolio that we believe is highly exposed to some of the more commoditized areas of the IT industry. Essentially, it remains difficult for us to understand the end game for HP."

hp enterprise groupq2

Can HP keep its server lead? According to IDC, HP held its 26.5 percent share of the server market. However, Cisco is surging and Oracle has stabilized. More worrisome, contract manufacturers' first-quarter market share was 7.3 percent, up from 4.1 percent a year ago. HP will need to prove its boxes can do more than be commodity servers. The company will have to tell a good virtualization story as well as build a case around value-added software. Hyperscale servers like the Moonshot family may also help the cause. Here's a look at the latest server data:

idc server share q1

Does HP's cloud vision work? HP recently launched its Helion portfolio of cloud services with an eye toward public and private clouds. The initial message revolved around OpenStack and that HP will be more open. HP will have to quickly add to its Helion case. Also see: HP, enterprise giants fill up OpenStack bandwagon | HP to invest $1bn in open-source cloud computing, launches Helion portfolio

Where does HP fit in the software defined data center mix? Every hardware vendor is talking about software-defined data centers, storage, and networking. The challenge is that these hardware vendors also have massive revenue streams to protect and the software-defined movement is ultimately a threat. HP will have to play the software-defined game as well as a company like VMware.

Can HP work the all-flash storage angle? HP's 3Par unit has been strong, but the second quarter highlighted how storage and converged systems showed weakness, analysts say. HP will have to better navigate the flash storage array market since that's where the growth is as enterprises process analytic and big data workloads. All the storage players have noted that spending has paused as companies consider alternatives — notably flash and cloud. HP's storage line needs to be in the fast SSD lane.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

Previously on Monday Morning Opener

Topics: Cloud, CXO, Data Centers, Hewlett-Packard, Servers, Storage

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3 comments
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  • HP good direction

    The Hewlett Packard news are good, under mandate of Meg Whitman it achieved personality, prestige and good direction, HP is in the eye of the buyer how one big option
    luis river
  • Shrinking is good,but.

    So I like that HP is shrinking, you have a PC industry not dead, but matured and has a far great challenge with competition from the likes of smartphones, tablets, and alternative PC devices like Chromebooks. All of which means in a weaker economy that you will sell less as money runs short. People will be looking to spend less on each device they need. Schools have turned to Chromebooks for the sake of buying more units but may get burned long term as the weaker hardware will not age gracefully. Tablets are now basically throwaway tech, and PC's are being extended in life because the OS does not demand new hardware. I once remember buying a laptop every two years. Now I figure 4 years is about right. Good luck to Meg and HP on finding that size of company that can be innovative and yet still be profitable in many areas of technology.
    JohnnyES-25227553276394558534412264934521
  • speaking of HP as a harware only company misses the point

    Hp has an opportunity similar to apple to develop hardware that makes the most of an ecosystem. Specifically the server sales (allot of what the article focused upon) is being tailored for maturing technologies. There is still many security questions simply unanswered in respect to cloud hosting and many sites will start implementing on-site on-premise cloud technologies. While the industry has continued to shill some technologies over another, ignore the licensing revenue gap that MSFT will face as an example, at the end of the day HP makes stuff that makes computing in the physical world a reality. Arguing that IT will become ubiquitous is fine, I see the argument for that looking forward, than focusing on HP is myopic as all existing vendor channels are under transformation. When you look at the end-game HP looks better than most vendors out there in this disruptive IT age. I imagine focusing on servers that are water and energy efficient, scale out and up, and meet the latest elasticity demands is the answer forward.

    I think that the mid-term step is some on premise sales that translate into longer term revenue when security and legislation surrounding it catch up.

    Finally on the openstack, in case you missed it: HP has revamped it's forward portal for big data. There is ESX/VMWARE images of their Vertica release 7 along with allot of the open-stack family links and vendor integration tools that creators have become use to utilizing for accelerating projects.

    https://my.vertica.com/community/

    In closing: HP buying Palm as dumb as MSFT trying to build a phone. In respect to servers any insinuation that HP is down and out is simply missing the fact that they do servers really well and that HP is tailoring these servers to the largest community (openstack)
    cdaringer@...