Tuesday, September 15, 2015

Hewlett Packard Enterprise Targets $50 Billion Annual Revenue, Faster Growth, Smaller Workforce

Hewlett Packard hosted an all-day Securities Analyst Meeting ahead of its pending split into two independent company.  Here are some highlights of the executive presentations for Hewlett Packard Enterprise.

The new Hewlett Packard Enterprise will have more than $50 billion in annual revenue and will trade under the ticker symbol "HPE".

Hewlett Packard Enterprise expects 25,000 to 30,000 people to leave the company, primarily associated with the ES transformation.  This will result in a GAAP-only charge of approximately $2.7 billion, beginning in the fourth quarter fiscal 2015. The cash impact will be approximately $2.6 billion over the next three years, beginning in fiscal 2016.

"Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business," said Meg Whitman. "As a separate company, we are better positioned than ever to meet the evolving needs of our customers around the world."

Hewlett Packard Enterprise said it is uniquely positioned to guide customers on a journey to a Hybrid Infrastructure, whether that includes public cloud (HP Helion, AWS, Azure or others), Virtual Private Cloud, Managed Private Cloud or Traditional Data Center. While it sees opportunities in cloud, the company believes traditional IT and private cloud will continue to dominate the market. Nearly 90% of IT spend over the next three years will be in traditional IT and private cloud.

Cloud revenue is expected to be about $3 billion in FY15 and monetized across the entire portfolio. The company expects cloud revenue in fiscal 2015 to be approximately $3 billion, growing over 20% annually for the next several years. This estimate includes revenue from the enterprise group, software and enterprise services segments which support customers' cloud build and consume.

Hewlett Packard Enterprise Inc. will consist of four main groups:

Enterprise Group - includes networking, all-flash storage, HP Apollo servers, converged systems, Aruba and TS Consulting

Annual Revenue of $27.8 billion, operating profit of $4.0 billion, operating margin of 14.
Approximately 50% of Hewlett Packard Enterprise's revenue will come from EG, spread across servers, storage, networking, and technology services.

Enterprise Services - includes cloud services
Annual Revenue of $20.3 billion, operating profit of $1.0 billion, operating margin of 4.9%
The Enterprise Services group is undertaking further cost reduction measures, office consolidations, data center consolidations and headcount reduction.

Software - includes ADM, Big Data and Security
Annual Revenue of $3.8 billion, operating profit of $0.8 billion, operating margin of 22.3

Financial Services - includes pre-provisioning, asset recovery and cloud migration
Annual revenue of $3.3 billion, operating profit of $0.4 billion, operating margin of 11.2%

Archived webcast materials are online.
http://h30261.www3.hp.com/news-and-events/hp-investor-events/upcoming-events/09-15-2015.aspx





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