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Cloud Driving HP’s Server Business Forward

HP announced is second quarter fiscal 2015 earnings on May 21, with company executives enthusiastic about the company’s upcoming split, and continued prospects in the cloud. For the quarter, HP reported net revenue of $25.5 billion for a year-over-year decline of 7 percent. Net earnings were were reported at $1.0 billion for a 21 percent […]

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Sean Michael Kerner

May 22, 2015

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HP announced is second quarter fiscal 2015 earnings on May 21, with company executives enthusiastic about the company’s upcoming split, and continued prospects in the cloud.

For the quarter, HP reported net revenue of $25.5 billion for a year-over-year decline of 7 percent. Net earnings were were reported at $1.0 billion for a 21 percent year-over-year decline. Revenue and income aren’t the only things declining at HP either, as the company also continues to drop employees.

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“In Q2 approximately 3,900 people exited the company, making the total reduction to date approximately 48,000,” HP CFO Cathy Lesjak said during her company’s earnings call. “We are on track to complete this existing program with a total of 55,000 people expected to exit by the end of fiscal 2015.”

One key bright spot for HP is in the server and cloud areas. HP CEO Meg Whitman said that Industry Standard Server (ISS) revenues grew by 11 percent year-over-year, partially due to HP’s success in the private cloud market.

“We’re pretty pleased with the results of our cloud business and what you have to remember is the success of cloud shows up in three places,” Whitman said. ” One is industry Standard Servers because we are by far and away the leader in private cloud, whether it’s Gartner or IDC or whoever, so that shows up in ISS.”

The other area where HP’s cloud business is represented is with HP’s virtual private cloud and managed cloud services which show up in HP Enterprise Services. Finally there is also the cloud service automation and orchestration software that knits it all together that shows up in HP’s software business unit.

“We may over time break out our overall cloud revenues as opposed to just having it show up in the individual businesses,” Whitman said. “But for the moment, probably through the end of this year, we’ll report it in the different businesses.”

HP Separation

Work continues to progress on HP’s planned separation, which was originally announced in October 2014. Whitman emphasized on the earnings call that she is more convinced than ever that the separation is the right thing to do. After the split HP Inc will handle the company’s consumer and printing businesses, while HP Enterprise will focus on the needs of enterprise customers.

“Since October, we’ve made substantial progress across a number of areas that gives me confidence that we’ll complete the separation by the end of our fiscal year,” Whitman said. “As separate companies we’ll have sharper focus on the markets we serve, the ability to adapt and shift more quickly, and a tighter linkage between rewards and results.”

Sean Michael Kerner is a senior editor at Datamation and InternetNews.com. Follow him on Twitter @TechJournalist