H-P Wins 7-year Agro Deal Renewal - Analyst Blog


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Hewlett-Packard Co. 's ( HPQ ) Swiss-arm has reportedly inked a seven-year information technology ( IT ) infrastructure service agreement with a globally acknowledged Swiss agribusiness company Syngenta Crop Protection AG. The contract price was kept confidential.

Formed in 2000, Syngenta AG is a vendor of seeds and pesticides across the world, also involved in biotechnology and genomic research.

Leveraging H-P's cloud computing solutions and data center support, Syngenta will shift some IT infrastructure to its private cloud. A private cloud is virtual technological infrastructure operated solely for a single organization, whether managed internally or by a third-party and hosted internally or externally. The cloud infrastructure will be Syngenta's platform for research and development activities. This will allow the company to deliver advanced agro products as and when required, ultimately helping growers to maximize their production.

Moreover, H-P's will extend its security and workplace services to Syngenta to secure its cloud environment as well as manage digital work-stations. Syngenta shares a long-term business relation with H-P and this deal renewal indicates the agro firm's unrelenting trust in the tech giant's services.

H-P has cut some more service deals in the past few months. Mortgage solutions provider Loan Value Group LLC selected H-P's services for five years. The Australian government selected H-P's technology service to design, build and maintain a portion of the information, communication and technology systems of the digital hospital.

Despite continuous deal wins, we remain cautious about the company's growth, particularly as competition from other big technology players, such as Cisco Systems Inc. ( CSCO ), Apple Inc. ( AAPL ), Acer and Dell Inc. ( DELL ) heats up. Moreover, the expected decline in PC shipments stemming from the hard disk drive supply cut due to the Thailand flood is raising investor confusion over the stock.

H-P now has a short-term Hold recommendation (Zacks #3 Rank).

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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 Nasdaq, Inc.

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