HPE may as well have stayed at home in bed: Biz turns non-profit as sales fall, costs rise HPE announced its fiscal third quarter results for this year on Tuesday, reporting mixed results with an overall dip in sales and growth in gross margins compared to the previous year. However, the enterprise giant couldn't do the biggest job – actually turning a profit. CEO Antonio Neri opened an earnings call with analysts …
Perhaps they will do a mea culpable, stop the expensive lawsuit - unless litigation goes all SCO-like as the primary profit centre - and do an Altria/PMI ...., decide to do a remerge with Hewlett Packard Inc and regain economies of scale on hardware and the profitability (on a vaping scale) of printer ink.
My guess is market sentiment.
HPE's biggest challenge is that their markets are shrinking fast and they don't have any brilliant ideas for how to change that. Buying other companies and integrating their products hasn't worked well for them (and no, I'm not think of Autonomy...) while the products that have sold well are looking old and stale.
The biggest warning signs are around the growth in traditional first world markets - there's none. Its flat or declining with only AsiaPac and Africa providing any good news. And China might ruin that.
If HPE redefined their mission statement as providing outstanding compensation to a non- performing C- Suite, we would have to applaud their ongoing success.
In fact, if you ignore their words and focus on their actions and results: that would appear to have been the plan all along.
Like the rest of the tin floggers HPE are blaming everything but the real cause of their problems... the hyperscale cloud providers. Workloads that were once on HPE, Dell, Netapp etc are moved to AWS Azure or Google... but yeah blame trade wars if you want...but if that's true how come the hyperscalers aren't showing similar declines
"None of them are primarily in the low-margin business of making hardware."
Ummm....are you sure? Typically an engineer would design a piece of hardware having a great deal of input into the specs of components and the finished product while a technician would take engineered components and assemble them...
Google may not make hardware to your standards (i.e. sturdiness or expandability), but you're buying off the shelf items while they design their own NIC's and associated switches/AI chips/power supplies/motherboards to ensure they are as cost-effective as possible when deployed in very large numbers (i.e. ~1m units/year - that's a guesstimate for Google and it maybe on the high side depending on how many different "hardware versions" they have in a given time period).
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