Morningstar | HPE Looks to Accelerate With All-Flash Arrays, High-Performance Compute, and Wireless
Hewlett Packard Enterprise is a leading supplier of IT infrastructure products and services. The firm generates revenue from selling computing servers, data storage arrays, and networking equipment as well as providing technical and financial services. After appointing a CEO in 2018, HPE is focused on profitability and excelling within nascent IT infrastructure trends. Although we like HPE's strategic direction, we are concerned about its ability to be less reliant on server revenue while showcasing success in difficult adjacent markets.HPE's largest revenue stream--commoditized industry standard servers--is within a competitive market with large brand-name foes and low-margin white box manufacturers. To combat profitability concerns, HPE pared its sales of servers to hyperscale cloud providers and shifted toward expanding margin accretive areas like hyperconverged infrastructure, network edge products, and hybrid cloud solutions. We posit that HPE should benefit from IT infrastructure upgrades in the short term. However, we do not expect HPE to gain a long-term competitive advantage over peers who offer similar portfolios or pure-play companies focused on a sole aspect of HPE's offerings.We do appreciate HPE's hybrid cloud strategy that contains Pointnext, GreenLake, and OneSphere. HPE offers the capital expenditures-favorable public cloud pay-per-usage model for on-premises and private clouds. To bolster its cloud strategy, HPE acquired firms with public cloud integration and cloud analytics expertise. In our view, HPE can position itself as one-stop with hardware for on-premises and private clouds while selling software and services to manage and optimize an entire network. While we like this flexible sales approach, we believe that competitors mimicking the consumption-based model may limit the quantity of enterprises that chose HPE.As data proliferates expeditiously, networks are transforming to process data closer to the end users, or the network edge, for efficiency. HPE's business outlook may hinge on its concerted network edge focus and its ability to cross-sell hybrid cloud solutions to permeate HPE solutions throughout enterprise networks.Hewlett Packard Enterprise is a technology company. The company's segments are: Hybrid IT, which provides a portfolio of infrastructure and solutions including servers, storage, and HPE Pointnext services; Intelligent Edge, which is comprised of cloud solutions that include wireless local area network, campus and data center switching, software-defined wide-area-networking, security, and associated services to enable secure connectivity; Financial Services, which provides investment solutions for customers that facilitate technology deployment models; and Corporate Investments, which includes Communications and Media Solutions, Hewlett Packard Labs and certain business incubation projects.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.