HP beats expectations, signs Helion customer

The mobile revolution has hit HP particularly hard, but the server giant finally served up some good news for investors yesterday, posting its first year-on-year revenue increase in almost three years. HP reported third quarter net revenue of $27.6 billion, up 1% from the year-ago quarter. Third quarter cash flow from operations was $3.6 billion, up 36% from the prior-year period. Investors sent the company’s shares up almost 5% this morning.
Still, CEO Meg Whitman noted that the trajectory might not continue. “I don’t know if we’ve turned the corner,” she told reporters yesterday.
HP has struggled to find its footing as its corporate customers rely more on mobile devices and cloud solutions instead of personal computers and on-premise servers. The company has made deep cuts in its workforce, eliminating positions in its server, storage and PC units, and even cutting some software jobs.
Wireless carriers are still important customers for HP, especially as more network software migrates to “off-the-shelf” hardware that can replace purpose-built appliances. Companies that develop virtualized solutions for carriers often configure them first for HP servers.
Carriers want to eventually move those solutions to cloud-based servers, and HP knows that. The company has been working hard to develop cloud software expertise. This spring HP announced a billion dollar commitment to OpenStack software initiatives. OpenStack is a free, open-source platform that can replace licensed software.
HP calls its OpenStack program Helion, and today the company announced one of Helion’s first major successes in the market. HP has signed an agreement with a Chinese content delivery network called Beijing UnionRead Information Technology. HP Helion will build and operate community clouds for enterprise customers in China.
“Community clouds will become increasingly prevalent in China as communities of interest, such as an automotive supply chain or a city government, seek to gain efficiencies and speed by leveraging a common cloud infrastructure,” said Martin Fink, executive VP and chief technology officer at HP.