Dell to Overshadow H-P Servers - Analyst Blog
23 11월 2011 - 9:36PM
Zacks
Tech major Dell Inc. (DELL) is looking to grow
its share of the server market, something that could hurt
Hewlett-Packard Co. (HPQ) in the longer term. Dell
missed its chance of becoming the leading PC shipment vendor after
H-P’s PC segment spin-off was called off by current CEO Meg
Whitman.
The two companies saw their fortunes reverse in the last
quarter, as Dell’s server business did much better than H-P’s. H-P
has seen a few hurdles in the last few quarters. Even the recently
concluded fourth quarter was lackluster. And now, we see H-P
encountering another threat from its nearest competitor Dell.
Both companies have excelled in developing servers that bring
the graphics processing unit (GPU) into the data center or
high-performance computers (HPC). However, while H-P has mostly
concentrated on the higher-end segment, Dell has been focused on
the low end.
Yesterday, both Dell and H-P announced their newest technologies
and ideas. H-P revealed a project named Odyssey, wherein the giant
would implement the idea of combining the features of the UNIX
operating system (OS) and its flagship x86 servers to provide a
single server platform targeting the mission-critical computing
segment, in which it has a rich experience of more than 25
years.
H-P reportedly is busy with the making of HP Integrity servers,
HP NonStop systems and the HP-UX and OpenVMS operating systems. The
yet-to-be released offerings feature Intel Corp.’s
(INTC) Xeon processors, Microsoft Corp.’s (MSFT)
Windows OS and LINUX OS.
Dell on the other hand, unveiled a suite of PowerEdge blade
servers featuring the latest Opteron 6200 Series processors from
Advanced Micro Devices Inc. (AMD). Dell asserts
that this line of products will be far more competent than H-P’s
Proliant line of servers. The newest offerings are expected to be
energy efficient, high speed performance gadgets suitable for
various enterprise applications.
As per statistics provided by the U.S. market research firm
Gartner during the second quarter of 2011, H-P topped its peers
both in respect of revenue generated and shipments made. We don’t
have details of the third quarter. But on the basis of recently
concluded quarters of the respective companies, we can see that
Dell has performed much better than H-P.
Server and networking revenue increased 13.0% year over year,
driven by continued momentum in server virtualization. Dell is
being prudent in providing mission-critical services and solutions
around the server, creating competitive differentiation, richer
configurations and generating higher profits.
On the other hand, H-P witnessed a decline of roughly 4% in its
Enterprise Servers and Storage & Networking segment. The
decline was mostly due to the lackluster server business, which
according to the company was due to a slower economic
environment.
We see that heavyweights such as IBM Corp.
(IBM) and Oracle Corp. (ORCL) are competing to
lead in the server segment with newer technologies and products.
Moreover, H-P is shifting focus to the enterprise software and
service business in an attempt to stabilize its margins.
Given the increasing competition, there is every possibility of
H-P losing its leading market position over time.
H-P has a Zacks #5 Rank, indicating a short-term Strong Sell
rating. Dell currently holds a short-term Buy rating, as indicated
by the Zacks #2 Rank.
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