HP Wins Contract from LeaseWeb - Analyst Blog
16 6월 2011 - 10:00PM
Zacks
The world’s largest personal
computer (PC) maker, Hewlett-Packard Company (HPQ)
has recently won a business deal from one of Europe’s largest
Internet hosting providers, LeaseWeb. As per the terms of the
agreement, the largest PC maker is expected to implement HP
ProLiant server technology in its data centers in the Netherlands,
Germany and Belgium, as well as at its newest facility in
Virginia.
The company has been in news over
the last couple of days, for restructuring its management team, to
improve operational efficiency. Leading the series of important
events was the departure of Chief Administrative Officer, Pete
Bocian. Moreover, the company also announced the departure CIO
Randy Mott. The company’s search for a suitable successor is still
on.
As per the latest contract entered
into by HP with LeaseWeb, the former will deliver new servers,
which is expected to increase performance and capacity to support
rapid business growth. This will help to enhance LeaseWeb global
network of eight data centers. The company offers high-quality
hosting, cloud solutions and Internet services to customers across
the globe, priding itself on an uptime of 99.99%.
Hewlett-Packard is currently on a
roll as it continues to win several deals and contracts. Recently,
the company secured a 10-year outsourcing contract worth $380.0
million from Healthways Inc. As per the terms of the agreement, the
PC maker will provide applications development solutions and IT
management services to Healthways. The deal is expected to
strengthen the relationship between the companies and help them
pursue new opportunities in the government and commercial
markets.
The company’s growth story remains
intact given its track record of new deal wins and acquisitions.
The company recently signed a deal to acquire Printelligent, a
closely held provider of managed print services (MPS) for an
undisclosed sum.
Moreover, HP’s acquisition of
Printelligent is a part of the company’s strategy to optimize the
traditional technology environment that its customers depend on and
deliver a connected world between the customer and the
enterprise.
It seems that the company is
undergoing significant structural changes given its longer lead
time and services selling and lengthy revenue recognition cycle. We
are expecting a change in the process during fiscal 2012.
Despite the company’s market
position and compelling product line, we remain cautious about
future growth, especially as competition from other big technology
players, such as Apple Inc. (AAPL), Acer,
Microsoft Corp (MSFT), and
Dell Inc (DELL) heats up. The
increasing competition is expected to impact pricing in the market,
thus moderating profitability to some extent.
However, a lowered revenue outlook,
reflecting moderate demand for desktop PCs, manufacturing problems
in Japan and the growing popularity of tablets, which is eating
into its core computing market are headwinds for the stock.
Moreover, HP lags its peer Apple in the tablet vertical.
Currently, Hewlett Packard has a
Zacks #4 Rank, implying a short-term Sell rating.
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