HPE has outlined its plans for its full year 2018, indicating that it will shift its focus away from lower margin business and focus more on high margin solutions and services.
HPE’s lower margin business – particularly its tier one server business – has been blamed for hampering growth.
HPE said it expects to record revenue growth of five percent, but this prediction takes the tier one business out of the equation.
For its full year 2018, HPE said it expects to report “modest” revenue growth, again discounting the troubled tier-one server business.
Speaking at an analysts meeting, HPE CEO Meg Whitman outlined the five-year turnaround plan HPE is in the middle off, insisting that splitting the company into HPE and HP Inc was the right decision.
“I can tell you without a doubt separating the company in two was absolutely the right thing to do for our customers, our partners, our employees and of course our investors. We’ve seen that in the financial markets reactions.
“In 2012 we embarked on a five-year journey to turn this company around and create better value for shareholders, customers and partners.
“The first step was to diagnose the problems and build a solid foundation for a turnaround. 2013 was all about fixing and rebuilding the business. We improved operations, drove better cash flow and repaired our balance sheet
“In FY14 we focused on recover and expansion. We stabilised our revenue trajectory, we reignited innovation across HP and further strengthened our leadership in key areas. Fy15 was about accelerating that progress. We continued to target investments in higher-margin areas and saw the opportunity to accelerate our business in key acquisitions like Aruba.”
Whitman said that HPE is in the process of strengthening through four key factors: Organic investment, in areas such as HPE Synergy; investment in partnerships; acquisitions of the likes of Nimble and SimpliVity; and portfolio optimisation, which saw its services and software business spun out into separate organisations.
“Our partner ecosystem is the best in the industry and absolutely critical to our future. Partnerships our going to be critical and that’s why we launched Pathfinder, our venture investment and partnership programme. We use our expertise to identify the best emerging start-ups and then we curate their innovation within our innovation which helps us deliver cutting-edge solutions to our customers with results they cannot find anywhere else.”
