) long-standing relation with the gigantic FMCG (fast moving
consumer goods) dealer
Procter & Gamble Co.
) was further strengthened with the latest information technology
(IT) service deal between the two. Yesterday, H-P announced that it
will be extending its enterprise service support to help P&G
achieve constant and uninterrupted IT services. The financial
details of the multi-year deal were kept confidential.
Per the terms, H-P will upgrade and automate P&G's IT
ecosystem with its 3PAR storage (acquired in September 2010 in a
bidding war with
)), networking, cloud and converged infrastructure solutions. With
all possible IT support from H-P, P&G will be able to convert
its private cloud to a hybrid cloud, which will allow greater
flexibility to cope with the changing market dynamics.
The solutions, altogether, will reduce system downtime and
ensure continuous data exchange across P&G's internal
processes. This will, in turn, lead to an efficient go-to-market
strategy that could keep the FMCG giant ahead of its peers.
H-P has been dealing with the consumer goods industry for years.
No doubt the tech behemoth has gained a rich experience over the
market dynamics, relying on which its sizeable customer base is
benefiting every time. Rapid product innovation, a good
understanding of the changing demand, supply chain optimization,
customer satisfaction and efficient customer feedback are critical
to sustain itself in the fast changing Consumer goods market. H-P's
technological innovations have given it the expertise to take care
of these key issues.
Despite consistent wins, H-P's services have not seen much
growth in the past few quarters. This could be because of the fact
that a large number of deals come from the government vertical.
Since government contracts usually go to the most competitive
bidder, take time to get approved and also don't come at attractive
prices. Another problem with H-P's government business is the
still-constrained budgets due to the uncertain macro
We are also disappointed with last quarter's results, which were
not as great as in the year-ago period. But we are looking forward
to the implementation of Meg Whitman's strategies and are
encouraged about H-P's shift in focus to the higher-margin cloud
computing arena. This will be beneficial to H-P since it is not
making desired profits from its legacy PC business.
Currently, H-P has a Zacks #3 Rank, implying a short-term Hold
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