Hewlett Packard Enterprise Company Profile

Category: Company Profile,FAITS
written by James Barr | November 2024

Profile

Hewlett Packard Enterprise (HPE) was born out of the November 2015 split of Hewlett Packard’s operations into HP Inc. (personal computing, printing, 3D printing, hybrid work, gaming, etc.) and HPE (enterprise systems, software, and services). The HPE portfolio consists of Compute, HPC & AI, Storage, Intelligent Edge, and Financial Services.

Fast Facts

Name: Hewlett Packard Enterprise Headquarters

1701 E Mossy Oaks Road Spring, TX 77389

(888) 342-2156

Web: https://www.hpe.com/

Type of Vendor: Enterprise Systems, Software, and Services

Founded: 2015

Service Areas: Global

Stock Symbol: HPE (NYSE)

History & Milestone Events

Hewlett Packard, as it was formerly known, was co-founded by William Hewlett and David Packard in 1939. HP began in a garage in Palo Alto, California with $538. Hewlett considered himself the idea man, while Packard assumed management responsibilities. The duo’s initial offering was an electronic test instrument known as an audio oscillator. From these modest beginnings sprang one of the largest computing companies in the world. Anecdotally, the company’s name was decided by a coin toss. Packard lost. In more recent years, HP was plagued by leadership challenges. In 2010, CEO Mark Hurd was ousted from his post for fudging his expenses. Hurd’s resignation involved a close personal relationship with a contractor who helped with the company’s marketing. Hurd’s replacement, Leo Apotheker, formerly of SAP, lasted less than a year on the job before being replaced by ex-eBay CEO Meg Whitman in September 2011. Apotheker was trying to transform HP into more of a software and services company but was faulted for his poor execution, lack of communications skills, and less-than-stellar company earnings. He also pre-announced HP’s inclination to depart the PC business, a move that many analysts believe damaged the brand.

In November 2015, HP was officially split into two companies and HPE, as it is currently known, was formed. This organization would go on to focus on its Enterprise Group and Financial Services segments following the divestiture of its Enterprise Services operations, as part of DXC Technology, as well as the spinoff and merger of its Software business with Micro Focus.

Significant highlights from HP/HPE’s past include:

1937 – Is founded as Hewlett Packard.

1957 – Goes public, later expanding its reach beyond the US and into Switzerland and Germany, where HP established marketing and manufacturing plants.

1961 – Enters the medical arena with its acquisition of Sanborn.

1971 – Develops the handheld scientific calculator, and from it, desktop PCs, the first desktop mainframe, and the LaserJet printer.

1989 – Acquires Apollo Computers, and with it, technology that would lend itself to the development of workstation products.

1992 – Buys Texas Instruments’ UNIX-based computer suite. 1997 – Purchases VeriFone.

1999 – Names Carleton “Carly” S. Fiorina as president and CEO … Spins off 15% of its test and measurement equipment, medical electronics businesses, and other non-computer operations under the name Agilent Technologies.

2000 – Disperses the remaining 85% of Agilent Technologies to its shareholders. 2002 – Acquires Compaq.

2004 – Forms the Technology Solutions Group.

2005 – Names Mark Hurd as president and CEO, replacing Carly Fiorina … Announces plans to cut 10% of its workforce.

2006 – Sees former chair Patricia Dunn and several other executives brought before the California Attorney General on charges of illegal solicitation methods in an internal boardroom investigation. 2007 – Exchanges patent infringement suits with PC competitor Acer in the US.

2008 – Acquires EDS, and integrates the company as part of its reformed Technology Solutions Group.

2009 – Is one of seven technology companies to announce a collaboration to facilitate the timely creation and operation of a white spaces database to govern use of the vacant television broadband spectrum, commonly known as TV white spaces.

2010 – Acquires Palm, 3Com, and 3PAR … Dismisses CEO Mark Hurd over the alleged misuse of corporate funds … Hires Leo Apotheker as new CEO.

2011 – Announces that it would acquire Autonomy for $10.3 billion … Removes CEO Apotheker and names Meg Whitman as his replacement … Reveals that the WebOS mobile operating platform will be shared with the open-source community.

2012 – Announces a major restructuring plan to combine its PC and printing divisions into one unit.

2014 – Announces a number of changes to its board of directors, including the naming of president and CEO Whitman as chair. Whitman replaces the departing Ralph Whitworth.

2015 – Officially splits into two publicly traded companies: HP Inc, under the direction of CEO Dion Weisler, and Hewlett Packard Enterprise, under CEO Whitman … Enters into a $100 million settlement agreement related to securities claims associated with Autonomy, which it acquired in 2011.

2016 – Acquires compute, data analytics, and data management firm SGI … Enters an IoT (Internet of Things) collaboration agreement with Nokia … Partners with Samsung to provide NFV (network functions virtualization) infrastructure and VNF (virtual network functions) technology.

2017 – Completes the separation of its Enterprise Services business, merging it with CSC to form DXC Technology … Spins off and merges its Software business with Micro Focus International … Promotes Antonio Neri to President (June) and as next CEO (November), the latter effective February 1, 2018 … Acquires Nimble Storage for $1 billion … Announces plans to move its corporate headquarters to Santa Clara, California by the end of 2018.

2018 – Invests $4 billion toward the development of “Intelligent Edge” technology … Issues an update to its InfoSight AI-management tool … Hires former Sprint executive Tarek Robbiati as CFO … Reveals plans to acquire Plexxi … Purchases RedPixie … Signs an agreement to purchase BlueData.

2019 – Closes its acquisition of supercomputing firm Cray for $1.4 billion … Outlines plans to transition to an “As a Service” Company by 2022 … Enters into a MoU with Ingram Micro to collaborate on AI (artificial intelligence) … Provides the Aitken supercomputer for NASA … Announces a $500 million investment in India … Teams with AT&T to explore a “go-to-market program” for accelerating the adoption of edge connections and computing … Collaborates with Samsung to develop technology to “accelerate 5G deployment.”

2020 – Establishes integration deal with WiPro … Contracted to deploy supercomputers in Finland, Australia, Czech Republic, and the US … Acquires SD-WAN company Silver Peak for $925 million … Launches GreenLake Cloud Services … Unveils the open-source Open Distributed Infrastructure Management initiative … Appoints Archana Deskus as CIO.

2022 – HPE built a new AI supercomputer, called “Austral”, based on HPE Cray supercomputers and the HPE Machine Learning Development Environment, for CRIANN (Centre Régional Informatique et d’Applications Numériques de Normandie), a high-performance computing (HPC) and AI data center located in Normandy, France.

2023 – HPE announced Gartner has recognized HPE Aruba Networking as a Leader in the 2023 Gartner Magic Quadrant for SD-WAN. This is the sixth year in a row that HPE Aruba Networking has been positioned in the Leaders’ Quadrant by Gartner.

2024 – HPE announced Gartner has positioned HPE as a Leader in the Magic Quadrant for Primary Storage Platforms. The most recent Gartner recognition is the 15th time in a row that HPE has been recognized as a Leader in the Gartner Magic Quadrant.

Strategy

As articulated by Antonio Neri, president and CEO of Hewlett Packard Enterprise at the HPE Securities Analyst Meeting 2023:

“HPE’s strategy is aligned to significant market trends around edge, hybrid cloud and AI – all of which create profitable market expansion opportunities that we expect will fuel our growth. As we unlock greater growth from these markets, our investors are poised to share in higher returns.”

As expected, AI is drawing considerable attention, as the ability to deploy artificial intelligence in service of HPE’s customers will greatly influence the company’s financial prospects.

“We recognize the AI market will be driven by computational capability, data-intensive workloads, and the need for specialized architecture; thus, we are targeting three areas: supercomputing, AI infrastructure, and AI platform software.

“We believe that we are differentiated from our competition in the ability to capture significant value from the growing AI market through our intellectual property portfolio, trusted expertise, and long-term sustained market leadership in supercomputing.”

Strengths

In an IT industry where companies, even established firms like Amdahl, Burroughs, and CDC, “come and go,” Hewlett Packard, like IBM, has demonstrated a remarkable ability to adapt to changing technologies, changing business conditions, and changing customers.

HP’s 2015 split into HP, to serve HP consumers, and HPE, to serve enterprise clients, illustrates Hewlett Packard’s commitment to remaining relevant in a world where on-premises computing has morphed into hybrid cloud, and new technologies like edge computing, the Internet of Things (IoT), and artificial intelligence are all progressing at an accelerated pace.

With respect to leading-edge technologies, HPE is well positioned to guide its customers through their transition to:

 Edge computing – in which more data processing is done at the network edge;

 Hybrid cloud – in which each workload is distributed to its optimum platform, whether on- premises or in the cloud; and

 Artificial intelligence – in which machine thinking augments an organization’s human resources.

Weaknesses

Although showing its market strength – particularly in the fields of edge computing, high performance computing, and artificial intelligence, HPE is concerned, nonetheless, about certain operational exposures:

 “In order to be successful, we must attract, retain, train, motivate, develop, and transition key employees, and failure to do so could seriously harm us.

 “We depend on third-party suppliers, and our financial results could suffer if we fail to manage our supplier relationships properly.

 “System security risks, data protection incidents, cyber attacks, and systems integration issues could disrupt our internal operations or IT services provided to customers.

 “Issues in the development and use of artificial intelligence may result in reputational harm or liability.“

From an external perspective, one of HPE’s primary strengths, the extraordinary longevity of its HP parent (since 1937), may be viewed negatively by customers who are drawn to flashy startups like OpenAI, and 21st Century powerhouses like Amazon and Microsoft.

Outlook

According to President and CEO, Antonio Neri, HPE has found that “navigating through the pandemic and planning for a post-COVID world” has “increased customers’ needs for as-a-service offerings, secure connectivity, remote work capabilities and analytics. We see a tremendous opportunity to help our customers drive digital transformations as they continue to adapt to operate in a new world.”

In HPE’s fiscal 2024 third quarter, revenue reached $7.7 billion, up 10% from the prior-year period.

  • Server revenue was $4.3 billion, up 35% from the prior-year period.
  • Intelligent Edge revenue was $1.1 billion, down 23% from the prior-year period.
  • Hybrid Cloud revenue was $1.3 billion, down 7% from the prior-year period.
  • Financial Services revenue was $879 million, up 1% from the prior-year period.

“We delivered a strong third quarter, with impressive revenue growth, especially from our AI system conversion, and we improved profitability,” said Antonio Neri. “These results reflect our momentum in delivering on our edge-to-cloud strategy across networking, hybrid cloud, and AI. We have driven meaningful innovation throughout our portfolio, which increases our relevancy with customers and positions us to continue to deliver profitable growth for shareholders.”

Given the company’s concentration on high-growth, high-promise tech sectors, especially AI, HPE’s future prospects appear excellent.

Business Lines

HPE’s operations are organized into five business segments:

Compute

The Compute business consists of both general-purpose servers for multi-workload computing and workload-optimized servers to deliver the best performance for demanding applications.

HPC & AI

The HPC & AI business offers integrated systems comprised of software and hardware designed to address High-Performance Computing (“HPC”), Artificial Intelligence (“AI”), Data Analytics, and Transaction Processing workloads for government and commercial customers globally.

Storage

The Storage business provides storage as-a-service and cloud data services through the HPE GreenLake edge-to-cloud platform and data infrastructure. Customers can also access AI and data-driven intelligence with HPE InfoSight and HPE CloudPhysics.

Intelligent Edge

The Intelligent Edge business is comprised of a portfolio of secure edge-to-cloud solutions operating under the Aruba brand that include wired and wireless local area network (“LAN”), campus, branch, and data center switching, software-defined wide area networking, network security, and associated services that enable secure connectivity.

Financial Services

The Financial Services business provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services.

Major Competitors

In the competition for enterprise dollars, HPE faces formidable foes:

Compute and Storage

  • Dell
  • Cisco
  • Lenovo
  • IBM
  • Netapp
  • Super Micro Computer

 HPC & AI

  • Dell
  • Lenovo
  • IBM
  • Fujitsu
  • Atos
  • Super Micro Computer

 Intelligent Edge

  • Cisco
  • Extreme Networks
  • Arista Networks
  • Palo Alto Networks
  • Fortinet
  • Juniper Networks

Recent Activity

Products and Services

October 29, 2024 – HPE announced that TEPCO SYSTEMS selected HPE GreenLake cloud to advance its data-driven approach to help advance decarbonization of the energy supply.

October 10, 2024 – HPE announced the HPE ProLiant Compute XD685 for complex AI model training tasks, powered by 5th Gen AMD EPYC processors and AMD Instinct MI325X accelerators. The new HPE system is optimized to quickly deploy high-performing, secure and energy-efficient AI clusters for use in large language model training, natural language processing and multi-modal training.

September 24, 2024 – HPE announced the expansion of HPE Aruba Networking Central, its security-first, AI-powered network management solution, with new AI insights and capabilities that include integration of OpsRamp for third-party network device monitoring of industry vendors such as Cisco, Juniper Networks, and Palo Alto Networks.

September 20, 2024 – HPE announced Gartner has positioned HPE as a Leader in the Magic Quadrant for Primary Storage Platforms. The most recent Gartner recognition is the 15th time in a row that HPE has been recognized as a Leader in the Gartner Magic Quadrant.

September 19, 2024 – HPE announced TOYOTA INDUSTRIES IT SOLUTIONS – a subsidiary of Toyota Industries Corporation – has selected HPE Aruba Networking to transform its network infrastructure. The solution, featuring Zero Trust security, will empower TOYOTA INDUSTRIES IT SOLUTIONS employees across Japan to improve their work-life balance by enabling them to remotely access the company’s network from any environment.

September 5, 2024 – HPE announced HPE Private Cloud AI is available to order and introduces new solution accelerators to automate and streamline artificial intelligence (AI) applications. HPE Private Cloud AI is a turnkey, cloud-based experience co-developed with NVIDIA to help businesses of every size build and deploy generative AI (GenAI) applications that was introduced as part of the NVIDIA AI Computing by HPE portfolio.

Financials

September 4, 2024 – Hewlett Packard Enterprise (NYSE: HPE) today announced financial results for the third quarter ended July 31, 2024.

In HPE’s fiscal 2024 third quarter, revenue reached $7.7 billion, up 10% from the prior-year period.

  • Server revenue was $4.3 billion, up 35% from the prior-year period.
  • Intelligent Edge revenue was $1.1 billion, down 23% from the prior-year period.
  • Hybrid Cloud revenue was $1.3 billion, down 7% from the prior-year period.
  • Financial Services revenue was $879 million, up 1% from the prior-year period.

Web Links

Arista Networks: https://aws.arista.com/
Atos Information Technology: https://www.atos.net/
Cisco: https://www.cisco.com/
Dell: https://www.dell.com/
Extreme Networks: https://www.extremenetworks.com/
Fortinet: https://www.fortinet.com/
Fujitsu: https://www.fujitsu.com/
HPE: https://www.hpe.com/
IBM: https://www.ibm.com/
Juniper Networks: https://www.juniper.net/
Lenovo: https://www.lenovo.com/
Netapp: https://www.netapp.com/
Palo Alto Networks: https://www.paloaltonetworks.com/
Super Micro Computer: https://www.supermicro.com/