CEO from a software company seems to be logical step from two point :
1. After a big Services acquisition, strengthening software which is a high margin business (compared to HW and Services) makes sense.
2. Oracle and SAP have been well known foe..very vocal in terms of cut throat competition… new HP CEO might know how to react with an aggressive competitor in Oracle. (known fellows Larry Ellison and Mark Hurd)
My sense is HP will focus more on solution selling than playing in silo (HW, SW, Services). Though this is not going to be significant success in short term; they will definitely aim for.
EDS integration has not been easy/”huge” success.. heard that few components of EDS (read “Emphasis”) are pitching internally for autonomy. HP’s software business (though many components are very nice products) has not been able to establish strongly in the market place. New CEO comes from a strong application software background (SAP). A good solution story for HP will require relatively higher focus on infrastructure and management software than applications. Adding more pieces to this will not help unless they have great leader to weave components into a compelling story. High expectation/big challenges for the new CEO. I don’t see great successes in near term.
I feel it is going to be a new inning for HP in changed competitive landscape (big acquisition making SW/HW/Services conglomerates). It will have to counter an aggressive inroads into its traditional hardware business from Oracle-Sun hardware business spearheaded by the very Mark Hurd, transform sales force create and deliver a good solution sales story, better integration of EDS. Post-recession growth phase of global economy might give HP some growth number to show to investors, real sustainable growth seems to be at least one year from now.
I think competition in infrastructure (include cloud/data center) hardware is going to be cut throat in coming months/quarters. Management software will follow the suit hence no surprise to see many appliance kind of offering flooding SMB and (why not?) enterprise market.
Solution story is going to be complex... more like a riddle for customers as market is on a new learning curve where canvas is rapidly changing to cloud. Good times for consulting services they might get many invites from customer but at the same time it will be far tougher to communicate values to customer.
Friday, October 8, 2010
Thursday, October 7, 2010
Q2 2010 IT Companies Earning Announcement
Dell reported a 22% year-over-year (YOY) increase in quarterly revenue to $15.5 billion. Net income was up 9% to $629 million. Highlights for the quarter include improved demand in all commercial businesses including enhanced demand for commercial clients which are being driven by an accelerating corporate Windows 7 refresh cycle. IT market, especially hardware part of it seems to be improving globally though growth rate has been uneven across geographies. On an overall most of the hardware vendors have reported good YOY growth.
Dell Desktop PC revenue continued to increase. Mobility and desktops revenues were up 21% and 17% respectively (YOY). HP’s Notebook and desktop revenues were up 10% and 27% respectively. HP lost unit share but managed to increase revenue from PC business. Apple grew desktop revenue by 15% and portables by 40%. Lenovo’s notebook PC increased by 58%(unit shipments) and desktop PC grew 36% (unit shipments) YOY.
Dell’s Server revenues increased 35% YOY to $1.9B on a 15% improvement in unit shipments. Blade server revenue increased 35% YOY and Data Center Solutions revenue growth exceeded 100% YOY. Previous two quarter also saw 39% increase YOY in revenue terms and 30% improvement YOY in unit shipments. HP’s Industry Standard Server revenues were up 31%. IBM's x86 server segment grew by 30% (17% growth in high-end x servers, and 16% growth in System x blade servers).
Dell’s Storage revenue grew 13% YOY to $624M with EqualLogic revenue up 63% YOY and PowerVault grew 14%. Dell transitions from being a straight reseller of EMC technology to an OEM storage model (including EMC technologies) coupled with Dell’s own storage IP. Dell had higher margins and profitability from Dell’s storage offerings. HP’s Storage revenue was up 10% year over year, IBM’s overall storage revenue grew 5% year to year. EMC’s storage revenue grew 21% and NetApp’s product (primarily storage and data management products revenue increased by 50% YOY.
Dell’s Enhanced Services grew 57% YOY to $1.9B. Dell’s recurring services revenue balance is $13.9B with approximately 70% of revenue coming from recurring sources. Perot System acquisition is going well and customers are receptive to Dell’s services offerings. HP’s services grew 1% and they still are lagging the market. IBM’s services revenue grew 1%, led by Global Business Services (GBS) growth of 3%; Global Technology Services (GTS) revenue was flat.
Revenue growth was driven across all regions in the quarter including an 52% YOY increase in BRIC revenue with BRIC plus 10 growing 48% YOY. In total 47% of Dell’s quarterly revenue was driven outside the US. APJ delivered 38% growth while the Americas and EMEA were up 17% and 24% respectively. Dell had another strong quarter in emerging countries with 52% growth in the BRIC countries. HP’s APJ grew 14%, EMEA grew 9%, and Americas grew 12%. (HP derives 63% revenue from outside US). IBM’s revenue from emerging markets grew 9% though IBM is focusing a lot on this market.
IT industry is witnessing hardware refresh cycle and most of hardware companies are benefited from this. IDC predicts that hardware growth for 2010 will outstrip the growth for services and software. Post-recession, there is increased focus on cloud computing and related services. Hardware that are being enhanced for better compatibility with these emerging technologies are gaining significant popularity. Data explosion and complex-heavy workloads are transforming the server and storage market.
Emerging markets have proved to be significant contributors of growth in economic slowdown and continues to be the battleground for most of MNC’s craving for growth. All vendors (IBM, HP and Dell) have done (have plans to) investments in these markets. Companies (Lenovo) deriving higher revenue from these markets have had high growth in previous few quarters. Dell has shown great performance in emerging market especially India and China recently where we have gained market leadership.
Economic slowdown caused many vendors to focus on operational efficiency – finding avenues for higher margin. IBM managed to get good margin despite low growth in overall revenue. Lenovo reported high growth for its smartphone business, HP recorded high growth (48% YOY) for its ProCurve networking products. Dell’s communication solution group is a well-timed strategy.
Dell Desktop PC revenue continued to increase. Mobility and desktops revenues were up 21% and 17% respectively (YOY). HP’s Notebook and desktop revenues were up 10% and 27% respectively. HP lost unit share but managed to increase revenue from PC business. Apple grew desktop revenue by 15% and portables by 40%. Lenovo’s notebook PC increased by 58%(unit shipments) and desktop PC grew 36% (unit shipments) YOY.
Dell’s Server revenues increased 35% YOY to $1.9B on a 15% improvement in unit shipments. Blade server revenue increased 35% YOY and Data Center Solutions revenue growth exceeded 100% YOY. Previous two quarter also saw 39% increase YOY in revenue terms and 30% improvement YOY in unit shipments. HP’s Industry Standard Server revenues were up 31%. IBM's x86 server segment grew by 30% (17% growth in high-end x servers, and 16% growth in System x blade servers).
Dell’s Storage revenue grew 13% YOY to $624M with EqualLogic revenue up 63% YOY and PowerVault grew 14%. Dell transitions from being a straight reseller of EMC technology to an OEM storage model (including EMC technologies) coupled with Dell’s own storage IP. Dell had higher margins and profitability from Dell’s storage offerings. HP’s Storage revenue was up 10% year over year, IBM’s overall storage revenue grew 5% year to year. EMC’s storage revenue grew 21% and NetApp’s product (primarily storage and data management products revenue increased by 50% YOY.
Dell’s Enhanced Services grew 57% YOY to $1.9B. Dell’s recurring services revenue balance is $13.9B with approximately 70% of revenue coming from recurring sources. Perot System acquisition is going well and customers are receptive to Dell’s services offerings. HP’s services grew 1% and they still are lagging the market. IBM’s services revenue grew 1%, led by Global Business Services (GBS) growth of 3%; Global Technology Services (GTS) revenue was flat.
Revenue growth was driven across all regions in the quarter including an 52% YOY increase in BRIC revenue with BRIC plus 10 growing 48% YOY. In total 47% of Dell’s quarterly revenue was driven outside the US. APJ delivered 38% growth while the Americas and EMEA were up 17% and 24% respectively. Dell had another strong quarter in emerging countries with 52% growth in the BRIC countries. HP’s APJ grew 14%, EMEA grew 9%, and Americas grew 12%. (HP derives 63% revenue from outside US). IBM’s revenue from emerging markets grew 9% though IBM is focusing a lot on this market.
IT industry is witnessing hardware refresh cycle and most of hardware companies are benefited from this. IDC predicts that hardware growth for 2010 will outstrip the growth for services and software. Post-recession, there is increased focus on cloud computing and related services. Hardware that are being enhanced for better compatibility with these emerging technologies are gaining significant popularity. Data explosion and complex-heavy workloads are transforming the server and storage market.
Emerging markets have proved to be significant contributors of growth in economic slowdown and continues to be the battleground for most of MNC’s craving for growth. All vendors (IBM, HP and Dell) have done (have plans to) investments in these markets. Companies (Lenovo) deriving higher revenue from these markets have had high growth in previous few quarters. Dell has shown great performance in emerging market especially India and China recently where we have gained market leadership.
Economic slowdown caused many vendors to focus on operational efficiency – finding avenues for higher margin. IBM managed to get good margin despite low growth in overall revenue. Lenovo reported high growth for its smartphone business, HP recorded high growth (48% YOY) for its ProCurve networking products. Dell’s communication solution group is a well-timed strategy.
Subscribe to:
Posts (Atom)
