HPE sales slide, profits evaporate... but think of the future, CEO urges The long feted turnaround of Hewlett Packard Enterprise has yet to show up after the misfiring tech corp reported another set of quarterly declines, and it’ll surprise no one that cost cutting is going to feature heavily once again. Revenue from continuing operations dropped 13 per cent to $7.44bn, as all but the Financial …
Profits down but think of the future....
in otherwords, we will feed a lot of headcount into the shredder just so that we can keep the dividend (an the CEO's bonus) on track.
When the future comes, there won't be anyone left but the BOD.
So HP how about actually letting us in Europe buy the same kit as the USA BEFORE it goes EOL in the USA and we get the dregs? Hey, you never know, it might actually bring in some more profits.
Bruce Springsteen put it best in the anthem, "Your Hometown."
"Foreman said these jobs are going boys
and they ain't coming back
to your hometown..."
When will we stop hearing the BS about how "the cloud" is a great opportunity for these dinosaur legacy companies like HPE, Dell/EMC/VMWare, IBM.
Take every reference to "the cloud" uttered by every company except Amazon, Microsoft and Google and, when the word "cloud" comes out of an executive's mouth, substitute it with the term "dotcom."
So, it would read like this:
"We look forward to the unlimited growth opportunity awaiting us and our new products in the dotcom (cloud) world."
Get the picture?
...that back in 2012 she promised to turnaround HP (all of it) and have it growing by 2016. Sadly history reports a rather different outcome.
She's been banging on about "headwinds" for years as the excuse for falling revenues. Perhaps reviving what's left of HP is one for the "too difficult" pile?
Too bad Meg will be with HPE until the bitter end.
Whitman is a Silicon Valley elite and great politician. She is a high profile female CEO. She has an infinite leash to run HPE into the ground if she chooses, and noone on the Board will dare blame her.
And she'll probably get a nice, fat golden parachute for doing so. HPE employees should be looking to abandon that sinking ship at every opportunity.
It's amazing that a CEO, on seeing on-prem sales disappearing as people move to AWS, Azure and Google, decides to pour money into more on-prem hardware companies. At least IBM is making an effort with Watson.(although with limited success)
The world is changing and HPE seems to have missed all the signs.
Recently left HPE - not voluntarily, but not looking back.
There were projects and departmentsunable to fulfil existing contracts because their staff had been made redundant. Well, obviously "redundant" was a misnomer. Hard to see how profit can be made when the non-overhead staff have been repeatedly decimated. How much can Meg earn by herself?
The only folks still in situ seem to be those clinging to their old final salary pensions - too expensive to make redundant, and too institutionalised to survive in the wild.
Business and Management speakers will dine out on the rise and fall of HP for years.
Whitman continues to make the usual mistake of setting redundancy targets - which will be implemented by the useless middle management - and then looks surprised when all the overhead layers are still in place, the frontline has reduced and the profits have taken another dive.
How many manager layers between a consultant on site and Meg Whitman 8 years ago and now?
The definition of stupid is repeating the same action and expecting a different outcome. This company is still doing the same things it was when I left 4 years ago.
It is actually painful to watch. I spent 16 years of my life in that company and experienced the managerial incompetence and confusion inside HP since the Compaq acquisition in 2001 - all the way until 2 years ago. Then I watched another big management show they pulled off in Atlanta, and I realised that I no longer had any faith in or hope for its future.
This company's skill in turning growth into contraction is astonishing. I believe it must be unprecedented in the IT industry - if not in global business. Everything it has acquired, it has effectively killed. Every creative force (HP Labs, product divisions, etc.) in its organisation has fallen victim to the corporate managerial antibodies with its politically correct enforcement of bad policies and decisions.
I think every person having or having had any senior managerial responsibility in HP should be ashamed of themselves.
HP (HPE) has been in a continuous state of reorganisation since the ill fated take over of Electronic Data Systems since 2008. Promises were made to completion authorities (including the EU) that the EDS business unit would continue to source hardware and software from third party vendors (Cisco, Sun, EMC etc). It soon became clear that HP had no intention of honouring these commitments, and HP Salesmen soon started controlling the technology solutions and spend for the Enterprise Outsourcing division. Special signoff was often required to purchase from third party suppliers where there was a HP equivalent. In the early days there were many heated arguments, particularly in the network space as the HP Procurve range was vastly inferior to Cisco.
HPE has reported for the last two quarters that that a Tier 1 provider has massively reduced orders for HPE servers. Speculation is that the Tier 1 provider is Microsoft who is shifting spend to either Dell or Chinese white box server vendors.
Now for some additional speculation. HPE Enterprise Services has been spun off to DXC. It is sensible to assume that DXC will be vendor neutral and operate a system similar to the old EDS Agility Alliance to provide the best price, technology stack, and service to their customer base. This will have the potential to cause:
• Reduced margins on hardware that HPE sells to DXC (as compared to the old internal HPE market).
• Reduced orders for HPE kit, which could have a similar impact to the Tier 1 Service Provider order reduction in the past two quarters (HPE Q1 & Q2).
• A potential for reduced margins in division such as HPE Technology Services. TS and other HPE business units were excellent at “milking” HPE Enterprise Services by cross selling permanent and contract resources and other services at hugely inflated rates. No doubt this will change as DXC starts to review all business operations to maximise revenues and profits.
HPE revenues and profits will probably continue to be massively squeezed over the next few quarters as they adjust to the real word of selling to external customers rather than pillaging profit from their internal outsourcing operation. DXC will probably start to benefit from cost reductions and increased profits from unshackling the company from a dominant internal hardware vendor where there was no real negotiation on price, discounts, or the optimisation of the technology spend.
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