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HP to Make Moscow Railways Safer - Analyst Blog
Hewlett-Packard Company ( HPQ ) recently announced that the Moscow Railway Division has deployed HP Service Manager software to formulate new quality and safety standards for its suburban transportation network.
HP Service Manager is a fully integrated software that helps create a more secure environment for its passengers. By deploying HP Service Manager, Moscow Railways will ensure transportation safety measures across different places such as platforms, pavilions, stations, POS terminals and suburban train salons, as well as other stock depots. Implementation of this software will result in customer-friendly operation for the railways.
Hewlett-Packard Company is currently pursuing a clear diversification strategy. From a pure play hardware, personal computing and server manufacturer and provider, the company is slowly but surely transforming itself into a more diversified player with increased focus on software solutions and renewed focus on the enterprise business. The company's restructuring plan and its implementation of the diversification strategy is slowly helping them to transform its business model.
Moreover, the recent restructuring plan adopted by HP is expected to be beneficial in the coming years. The restructuring will result in cost savings of approximately $3 billion to $3.5 billion, largely as a result of retrenching 27,000 to 29,000 workers by the end of fiscal year 2014, and also due to focus on some new business divisions. Non-labor cost savings will also be generated through increased supply-chain efficiency, and price and promotion strategy.
The company believes that the majority of the savings from restructuring will be reinvested into the business to foster innovation, particularly in cloud, Big Data analytics, information management, security and software segments. Although the cloud offers plenty of opportunity, the company is facing tough competition in this segment from Salesforce.com ( CRM ), International Business Machine ( IBM ) and Accenture Plc . ( ACN ).
Over the last few quarters, results were negatively impacted by macroeconomic factors and weakness in its core computing market. This apart, the printer business continues to look challenging. The company is taking major steps to expand and revitalize its business. Management has been focusing on cost control, growth initiatives and improving the health of its balance sheet.
While the PC market is expected to remain sluggish this year and declining revenues as well as competition from Dell, Lenovo and the top tablet makers are concerns, back-to-back product launches and growing exposure to the enterprise storage, software and services segments and increasing opportunity in the cloud market is encouraging.
Currently, HP has a Zacks Rank #1 (Strong Buy).
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