Tag: HP

HP’s Autonomy shareholder peace pact shelved

munich-agreemnetIt looks like shareholders are not allowed to collude with HP board members to blame its god-awful Autonomy buy on the British company after all.

Shareholders and HP agreed to bury the hatchet so that they could sue the former owners of Autonomy. US district judge has said that such a deal was wrong because it absolves HP completely from any blame.

Judge Charles Breyer concluded in a San Francisco court filing that the shareholders appear to be relinquishing a whole universe of potential claims regarding HP governance and practices with no factual predicates that overlap the Autonomy acquisition – the subject of this litigation.

He rejected the motion for preliminary approval of the second amended settlement. Judge Breyer added that HP had abdicated its duty to ensure that shareholders’ rights were being protected.

HP bought UK data search and analysis firm Autonomy for $10 billion, but a year later it claimed it found “serious accounting improprieties” and had to write off $8.8bn from the transaction.

Autonomy has denied any wrongdoing and argued that it played by the rules and HP knew about its accounting practices prior to the buyout.

HP said it was disappointed the court did not approve the settlement as submitted, the court recognised that a settlement releasing the HP directors and officers from Autonomy-related claims ‘represents a fair and reasonable resolution of the litigation’ HP remains committed to holding the architects of the Autonomy fraud accountable.


Asian servers threaten US hegemony

lenovo-logoA report said that increased production by major Chinese vendors will topple US players from their grip on the server market.

Digitimes said that Lenovo, Huawei and Inspur are likely to ship a total of two million units in 2015, knocking Dell off the number two slot.

Earlier this year, Lenovo bought IBM’s X86 business and that means the company is likely to ship a million server boxes in 2015.

Meanwhile HP, the market intelligence firm said, will show a decline in server shipments of 10 percent this year.

By the end of next year, the combined shipments worldwide from Chinese vendors is likely to amount to nearly 20 percent.

Meanwhile, the multinationals are threatened by ODMs (original design manufacturers) like Quanta, which are squeezing the Dells and HPs of this world by selling units direct at a knockdown price.

Thin clients get skinnier

Dell logoThe move towards thin clients has slackened after some growth prompted by Microsoft’s decision to deck Windows XP support.

IDC said shipments of terminal clients and thin clients amounted to 1.35 million units in the third quarter of this year, falling by 1.8 percent and bucking predictions.

While Windows XP made some move from PCs to thin clients, public projects were delayed and that accounts for the slippage.

Thin clients represent a massive 97 percent of enterprise client devices.  Within the thin client umbrella, those without operating systems – so called zero clients – still hold 24.6 percent share.

The winners in the thin client race for the third quarter are HP, Dell, Ncomputing, Centerm and Igel.  Of these, Dell saw growth of 16.6 percent compared to the same quarter last year, while Ncomputing’s share slumped by 44.7 percent.  HP more or less held its own although its share fell 4.3 percent compared to the same quarter last year.

Storage revenues continue to grow

storageThe generation of vast amounts of data continues to fuel the disk storage systems revenue in the third quarter.

With revenues of $8.8 billion, up 5.1 percent from the same period last year, 25 exabytes shipped in the quarter, said IDC.  Capacity shipments soared by 42 percent during the quarter, compared to Q3 2013.

IDC said sub $100K external array revenues grew by over six percent during the quarter, but shipments ODMs (original design manufacturers) directly to hyperscale datacentres showed positive growth.

EMC remains at the top spot for the quarter, followed by HP, Dell, IBM and Netapp.

ODM direct sales accounted for 24 percent of the market however, outstripping the traditional vendors.  And this trend is continuing, as we’ve reported previously, with ODMs also shipping more and more servers directly and bypassing the brand names,

HP pushes notebook sales

HPStrong orders from both the enterprise and from the retail market meant growth in notebook sales during the month of November, largely due to HP’s position in the market.

That’s according to data from Digitimes Research which claims the top five multinational vendor and Taiwanese original design manufacturers (ODMs) showed shipments growing by 10 percent in the month, following a decline in shipments in October.

All the vendors are attempting to stem the growth of tablets and smartphones and the research outfit claimed HP ordered four million notebooks from its ODM partners in the month – with Quanta, Compal, and Investec benefiting from the push by the US giant.

The researchers claim that shipments of global tablets will be in stasis for 2014, when all the figures are added up.  And it also predicts sales will decline in 2015.

Digitimes Research estimates that combined shipments of notebooks and tablets will be over 350 million units in 2015 but the major vendors incuding Apple, Lenovo, Samsung, HP, Asustek, Dell and Acer will take steps to secure their positions in the marketplace.

Server revenues grow as shipments fall

server-racksShipments of servers in Europe, the Middle East and Africa (EMEA) fell by four percent in the third quarter of 2014 but revenues rose by 1.2 percent year on year to amount to $2.9 million.

Gartner said that growth seen in the second quarter of this year was “a short lived phenomenon and marginal revenue growth…highlights the fragility of demand”.

But despite this, revenues grew for the third consecutive quarter following 10 previous quarters where revenues declined.

HP managed to grow its revenue lead in the regions with 6.4 percent growth, although shipments declined by 8.2 percent.  The growth was largely accounted for by demand for rack optimised and blade system.

Dell managed to displace IBM as second in place in terms of both revenues and shipments.  It managed to grow nine percent in revenues and 3.4 percent in shipments.  IBM, of course, is ridding itself of its X86 business to Lenovo, while its RISC shipments were hit by a fall in demand for Unix systems.  Its lucrative mainframe business is in stasis as Big Blue readies new launches.

Gartner thinks one of the problems is that IT departments in enterprises are struggling because there are datacentre modernisation initiatives which means they are taking their eyes off the ball in the traditional server marketplace.

If RISC, the Intel Itanium and Unix revenues are counted as one, they fell in the quarter by 13.2 percent.

Mike Lynch gives HP a slap

cableA new document, being waved angrily by former Autonomy boss Mike Lynch appears to question how the maker of expensive printer ink wrote down the value of Autonomy.

HP conducted a re-basing exercise after Lynch left. The process was led by Chris Yelland, a senior HP executive who had been parachuted in to Autonomy shortly after the acquisition and went on to run its finance team.

The findings of the re-basing exercise was produced on December 19 2012 by a member of the revenues team at HP Autonomy. According to Lynch, it raises questions about HP’s reasoning for its $8.8 billion writedown of Autonomy in November 2012, $5.5 billion of which was stated to be due to “accounting misrepresentations” at the company.

“The document was completed a month after HP made those allegations and any future valuation of the company would have had to include them. HP’s own court filings repeatedly assert the rebasing analysis includes the effects of the allegations,” he said.

In a series of spreadsheets, HP placed Autonomy’s deals into different columns, according to whether it believed revenues were correctly booked under the UK’s IFRS accounting standards or whether they would meet US GAAP rules, the accounting standard used by HP.

Lynch said that the way HP labelled columns in this document shows Meg Whitman’s attempt to blame Autonomy and HP’s former management for her own mismanagement is no longer tenable.

HP believed about $350 million worth of deals at Autonomy between 2010 and the first three quarters of 2011 were booked improperly. Deals worth $8.4 million were considered “Not IFRS compliant confirmed,” whereby HP believed they fell short of UK accounting standards.

More than $252.4 million worth of revenues was considered “Not IFRS compliant probable”. This suggests that the US company considered the accounting for these Autonomy deals was suspicious, but had not conclusively found it did not meet UK accounting standards.

In addition, $83.6 million worth of deals were placed in a category labelled “Management Difference/US GAAP difference,” where these transactions had been removed for not meeting the requirements set by US GAAP accounting standards.

Lynch also objected to the reasons why HP considered some deals improper.

The document placed Autonomy transactions in several different categories, such as “hardware resale”: deals where PCs and other devices were, in the majority of cases, sold without Autonomy software being preloaded. Although these sales generated revenues, they often made an overall loss.

HP claimed hardware deals such as these were not commercially sound and were used purely to inflate revenue however, Autonomy has argued they served a marketing purpose, such as helping to establish commercial links with blue-chip customers.

HP also did not like how Autonomy booked part of the revenue from a continuing contract as an upfront licence payment, and “reciprocal deals”, whereby Autonomy sold software to a company while claiming to buy a product or service from that same customer.

HP said that Autonomy used early-payment discounts to encourage customers to pay future hosting fees early, then booked these as revenue immediately when they should have been spread across future periods.

HP has not revealed the precise calculations that led to its writedown on the company, more than $5 billion of which was due to alleged accounting improprieties.

Lynch claims the document raised doubts as to the reasons why HP took its writedown and the size of the charge. “Three years post-acquisition, Meg Whitman needs to explain the exact calculation of the writedown to her shareholders, as well as to the relevant authorities where accounts have been restated and attempts made to reclaim tax on the basis of her allegations,” he said.

HP locks in corporate customers

superdomeAhead of the breakup of the company, HP is doing its best to make sure that its big corporate customers do not flee.

The maker of expensive printer ink has announced a cunning plan to help retain important customers by allowing them to leave behind their Integrity.

HP will offer versions of two computer server lines under H-P’s Integrity moniker—Superdome and NonStop—that will be powered by Intel’s Xeon chips. HP’s Integrity machines now use Intel’s Itanium chips.

HP’s new Superdome model has sockets to plug in 16 Xeon chips and offers nine times the performance of a conventional H-P system with eight Xeon chips, the company said. H-P has developed accessory chips and software to speed up communications between chips and improve reliability.

Revenue from these “business-critical” servers, declined 29 percent in the quarter ended in October over a year earlier. However, Superdome and NonStop servers are still used by banks, telecommunications carriers and other companies particularly concerned with reliability.

Integrity only made $929 million in revenue in the fiscal year ended October 31, which was nothing compared to the $12.5 billion generated from more popular x86 servers.

HP needs to keep these customers sweet because they buy software, services and other hardware from H-P that hinges on the applications running on the Superdome and NonStop machines.

Under the plan HP will keep developing Itanium-based systems but will help its clients move Intel’s mainstream Xeon technology.

Intel, which introduced its last Itanium model in late 2012, has disclosed plans for a successor, which is code-named Kittson. The chipmaker hasn’t said when that product will arrive nor described models it may develop after that.

For Superdome, HP is encouraging customers to move to the Linux operating system or other software. HP is porting NonStop software to run on Xeon chips. The company is offering services to help customers migrate to the new technology in both cases.


Former HP goddess aims for US president

6874335353_8791daf3a9_bFormer HP boss  and peddler of expensive printer ink Carly Fiorina is apparently going to have a crack at being the next republican president of the US and is standing on a ticket that she is the only woman candidate and the only CEO.

Fiorina has been talking privately with potential donors, recruiting campaign staffers, courting grass-roots activists in early caucus and primary states and planning trips to Iowa and New Hampshire starting next week.

She would be considered an outsider. She has sought but never held public office and her last campaign was in such a disarray it could hurt her current one.  After all how can you stand saying you are an effective manager when you owe nearly $500,000 to consultants and staffers from your failed 2010 Senate bid in California?

Republicans have spoken about Fiorina with disdain, saying she has an elevated assessment of her political talents and questioning her qualifications to be commander in chief.

However analysts say that she might make a better candidate than the suited men that the GOP traditionally chooses.

She is also a free-market advocate who would act as an antidote to the “left wing” views of Elizabeth Warren.

The GOP also has a problem attracting women voters with some of its prominent members favouring stances on issues like rape, abortion and glass ceilings which are so backward they were out of date when the book of Leviticus was written. The party claimed to supporting women during the mid-terms only to award all the committee chair roles to white men after the election.

Helping Fiorina chart her political future are consultants Frank Sadler, who once worked for Koch Industries, and Stephen DeMaura, a strategist who heads Americans for Job Security, a pro-business advocacy group in Virginia.

When Fiorina was CEO at HP she was famously described as more important than the King of Spain, by an aide.

HP sees profits plummet

meg-whitmanThe maker of expensive printer ink, HP, has surprised the cocaine nose jobs of Wall Street by telling them that its quarterly revenue fell in almost every business segment over the year.

The numbers highlight weaknesses in the company ahead of the company’s planned 2015 separation of its enterprise services from its traditional computer and printing units.

Sales fell 2.5 percent in the fourth quarter to $28.41 billion, from $29.13 billion a year earlier, HP said. Analysts had expected $28.76 billion. Profit declined 2.7 percent to $2.01 billion.

Chief Executive Meg Whitman cryptically told analysts that she said that “turnarounds were not linear” which will be news to any driver who uses a roundabout or attempts a three point turn.  She insists that after three years of her rule, HP is exactly where she thought it would be.

The enterprise group and enterprise services, areas that Whitman had previously flagged as growth drivers, showed revenue declines of four percent and seven percent.

On the call, Whitman said she expected a slower decline in enterprise revenue next year. Enterprise services would be the biggest “swing factor” in the company’s 2015 growth projections, she said.

The company’s personal computer division grew by four percent after a 12 percent jump in the prior quarter. Much of the growth in PCs was driven by a Microsoft decision to quit supporting older software, and Whitman said that was pretty much over now.

The high-margin printer business shrank by five percent.

Whitman is pinning her hopes on splitting the company into two next year, separating its computer and printer businesses from its faster-growing corporate hardware and services operations, and eliminating another 5,000 jobs as part of its turnaround plan.

“This separation was totally the right thing to do for this company,” Whitman said. “It is remarkable how it focuses the mind on overhead.” Well if turnarounds are not linear then you have to keep an eye on what is above you otherwise a turnaround might fall on you.

HP teams up with Wind River on Open Stack

founding_billDave_tcm_245_1630145Maker of jolly expensive printer ink, HP has forged a glorious alliance with Wind River to provide customers with a network functions virtualisation (NFV) solution based on HP’s Helion OpenStack.

Products which are spawned by the new alliance will enable carrier-grade   NFV capabilities.

The companies worked on the project jointly, taking the HP Helion OpenStack offering and Wind River’s carrier-grade technologies to further the already developing OpenStack NFV market. According to OpenStack-focused vendor Mirantis, telecommunications companies have been experiencing success with OpenStack-based NFV. Although still a new function, it appears that it is beginning to catch on with customers and vendors alike.

In a statement, the pair said that they wanted to create a product which allowed for the benefits of cloud computing, while meeting their rigorous reliability, performance and management requirements.

Saar Gillai, senior vice president and COO of HP Cloud and general manager for NFV at HP, in a prepared statement said the HP and Wind River project would provide a fully integrated and supported HP Helion cloud solution for carrier grade NFV.

“ We will also work together to enhance OpenStack technology to help ensure it evolves to meet carrier grade specifications,” Gillai said.

The new service will help cloud services providers compete better in a changing market. With the OpenStack NFV offering, HP and Wind River expect CSPs will be able to accelerate the transformation of their networks while also lower the total cost of ownership by adopting commercial, off-the-shelf hardware, they claim.

Carrier-grade NFV capabilities are not quite ready for customers, though. There is still some work to do to get the HP/WindRiver OpenStack NFV solution together, but the companies plan to launch in 2015.

Jim Douglas, senior vice president and CMO of Wind River said the telecom industry was eager to tap into the vast potential of NFV.

“By taking advantage of a virtualized or cloud environment, service providers can easily and quickly introduce new high-value services while reducing costs. In every case, maintaining carrier grade reliability is critical,” Douglas said.


Notebook PC sales slumped in October

notebooksOctober was always one of the months where computer vendors expected to do well.

But, according to research from Digitimes Research, shipments fell by an average of 15 percent.

The slump in shipments affected not only the branded vendors like HP, Dell and the like, but also the top three original design manufacturers (ODMs) – those are manufacturers which make unbranded machines.

The researchers believe the fall was caused because many companies released cheaper notebooks in September.

HP, in particular, suffered a decline in shipments while dell, Asustek and Lenovo also showed a fall compared to the same month in 2013.

The researchers believe that HP will see its notebook business suffer in 2015 as a result of the decision to split the company in two.

Workstation market continues to grow

hpworkstationDesktop PCs and notebooks might not be the flavour of the decade but the need for powerful workstations continues to grow.

IDC released figures showing that worldwide shipments of certified workstations rose in the third quarter by 7.6 percent, compared to the same quarter in 2013.

A total of 930,894 units shipped and IDC said that this is the sixth consecutive quarter of positive growth in what remains a competitive market.

Worldwide, the Middle East and Africa grew by 39.3 percent year on year, Latin America grew by 31.6 percent, and the US and Western Europe, with market shares of 39.2 percent and 25.1 percent grew by 6.7 percent and 2.1 percent respectively.

There aren’t that many vendors selling desktop workstations but HP continues to be the top dog with a 45.8 percent market share.

Dell grew by two percent year on year and has a 36.6 percent market share, while Lenovo has a year on year growth of 24.8  percent, growing its share 2.3 points and with an 11.7 percent slice of the market worldwide.

Fujitsu and NEC came in at fourth and fifth, showing only single digit market shares.

Dell counter attacks against rivals

Conan 1While Michael Dell was fighting to take his tin box outfit private, his rivals used the uncertainty to steal his customers – now he is counter-attacking.  

Dell opened the Dell World conference and wasted no time denouncing the “turmoil” his rivals in the industry are going through.

“They’re splitting away businesses, spinning off pieces of their businesses, and one has to ask the question: who is this for? Does this actually help the customers? Does it help them create the next great innovative products?”

It is deeply ironic for Dell. At the time HP Meg Whitman was calling Hewlett-Packard a “paragon of stability” compared to his company and IBM smugly told his customers that he was doomed.

Now Dell can point out that Whitman is breaking the the company in two. And IBM is selling its x86 server business to Lenovo and fighting to keep its profits above water.

Because the company is private, Dell does not have to worry about those quarterly targets and can plan.  He even had a dig at Carl Icahn who made him pay millions more to take his company private.

“Dell can focus on a future that’s “beyond the next quarter, the next year or the next shareholder activist,” he said.

Dell’s PC shipments grew almost 20 percent in the U.S. last quarter, Michael Dell said, faster than those of HP and Apple.

Today Dell is expected to announce a new “converged infrastructure” system called the PowerEdge FX, he said, which combines servers, network and storage in a new design that offers “the most density in the world.”

Datacentre automation market worth billions

server-racksA report by Markets and Markets estimated that by 2019 the datacentre automation market will be worth $7.53 billion.

The report said that demand for fast data access and storage continues to rise and that’s creating more and more datacentres.  Datacentre automation is sometimes known as Software Defined Data Centres (SDDCs).  Automation helps management deal with scalability, flexibility, manageability and reduced costs.

The market research company said it segments the datacentre automation market by hardware such as network automation, server automation and storage automation.  It also values the secor by service including consulting services, installation and support.

The demand for data is forcing businesses to either build new datacentres or upgrade existing sites.

And the cost of datacentre infrastructure continues to increase at the same time as IT budgets continues to decrease.

Majr vendors in the industry include HP, Oracle, Dell, Brocade, Cisco, IBM, CA and BMC Software.