Cloud computing has emerged as a key focus area for all the
information technology companies across the globe, and
) is no exception. The company has recently announced a new cloud
computing solution in a bid to revamp its business.
The new cloud-based service enables clients to deploy private,
public and managed clouds in a traditional information technology
atmosphere, helps address the business needs of several existing
and prospective clients and is compatible with all the latest
technologies used by various companies.
The new offering from the technology major is expected to help
the airline industry to develop an integrated platform for airline
reservations and travel. Moreover, the "Cloud bursting"
capabilities help external clients to access the blocks of external
cloud capacity through the HP Cloud System, Amazon Web Services and
Savvis. It is also expected to help in arranging new tools to
manage technology across various cloud environments. The new
offering includes a printing system that enables driverless
printing from mobile devices.
The demand for a reliable cloud solution has increased in recent
times with enterprises thinking seriously about the cloud option.
The development and use of public clouds is not an easy process.
This is where HP steps in as a service provider and offers its
public cloud that small telecom providers can resell.
The recent acquisition of Autonomy was a step in this direction
as its private cloud is expected to be fully utilized by HP. The
Autonomy private cloud surpassed more than 50 petabytes of Web
content, video, email and multimedia data and is spread across
6,500 servers at 14 global data centers. The Autonomy cloud also
facilitates automatic data recognition architecture.
Although Hewlett Packard continues to march ahead with its cloud
strategy, the ensuing courtroom battle with long-time partner
) is likely to weigh on investor sentiment. Though lawsuits
encircling patent infringements and violation of contract terms are
common in the tech sector, we think that the legal battle between
these two giants will be a major issue.
With arguments going both for and against the company, the
result of the trial is highly uncertain. In the meantime, its
server business will continue to take a beating.
Hewlett-Packard's second quarter 2012 earnings per share
exceeded the Zacks Consensus Estimate, but both earnings and
revenues declined on a year-over-year basis. Results were
negatively impacted by exchange rate fluctuations, greater mix of
low-margin products and competitive pricing in its hardware
business. Its recently-announced restructuring initiative is
encouraging however and should improve margins going forward.
However, HP continues to see challenges in its printer business.
Also, margins in the services business are likely to remain weak
this year and the macroeconomic trends as well as the competitive
pressure remain headwinds.
Currently, HP has a Zacks Rank #3, implying a short-term Hold
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