HP Grabs Big Catalonia Agency Deal - Analyst Blog


Hewlett-Packard Company ( HPQ ) has managed to grab yet another big deal. The company recently announced that it has won a deal from Generalitat de Catalunya (CTTI) worth $40 million. According to the agreement, this computing and technology firm will be modernizing CTTI's applications to support economic growth in that region.

The six-year agreement will require HP to provide services to enhance the efficiency and productivity of the Government of Catalonia. As a result, the organization's process of delivering, managing and evaluating applications is likely to improve.  This will, in turn, increase efficiencies at CTTI .

Hewlett-Packard intends to diversify its service offerings to tap new markets. The company's new business wins, deal renewals and current restructuring initiatives support the revival of its business process.

The company is strengthening its business by increasing product acceptance as well as improving service growth. We believe that these measures will likely drive growth, improve its margin and offset the challenges in the PC business. The new product mix is a strong step taken to improve the profitability of the company.

The money generated through this process will be mainly reinvested in the business to foster innovation, particularly in the cloud. Moreover, the company is also exploring other segments like data analysis, information management, security and software. Although the cloud offers plenty of opportunities, Hewlett-Packard is seeing tough competition from Salesforce.com ( CRM ), IBM ( IBM ) and Accenture Plc . ( ACN ).

Unfavorable macroeconomic factors and cannibalization by tablets have resulted in the deterioration of the core computing business of the company, so new business initiatives are being increasingly adopted to fuel growth. Moreover, the cloud computing and mobile computing business is slowly picking up.

Currently, Hewlett-Packard carries a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ACN , CRM , HPQ , IBM



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