HP posts Q3 sales drop, enterprise boss replaced

Hewlett-Packard announced an eight per cent slide in revenue for the third quarter and also reported that the computer maker’s enterprise group chief, Dave Donatelli had been reassigned.

Donatelli will now “take on a new role focused on identifying early-stage technologies and he did successfully with 3PAR and 3COM,” an HP statement said.
He will be replaced by Bill Veghte, the company’s chief operating officer, who will not become vice president and general manager of the HP enterprise group. Veghte ran HP Software, held the position of chief strategy officer and over the last 15 months was the company’s COO.

HP also said it will combine its marketing and communication organizations under the leadership of Henry Gomez, HP’s chief communications officer.

“Bill’s vision for the future of IT, his breath of experience in the industry and at HP, and his deep enterprise experience, make him the ideal candidate to help HP navigate a rapidly changing market,” said Meg Whitman, HP president, in statement. “…Looking forward, the software-defined data centre and cloud computing offers us a great opportunity to extend HP’s leadership in the technology infrastructure space.”

HP reported that for the quarter ended July 31, its revenue declined by eight per cent to $27.2 billion from the year-earlier quarter. The firm’s income thought was $1.4 billion, up from last year’s loss of $8.9 billion connected with the HP’s purchased of software maker Autonomy.

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HP control over expenses and ability to channel savings to back lucrative products has allowed the company to grow its profits despite declining revenue but it still has to grow its non-PC business, according technology analyst group Technology Business Research Inc.

“The strategies implemented by CEO Meg Whitman and her executive team have not provided remedy to triage shrinking market share and declining revenues,” said Jack Narcotta, TBR analyst. “HP has yet to prove it can grow its non-PC and server business to offset staunch declines in those two industries…”

He said fierce completion in the market which will persist through next year will curtail HP’s ability to rebound.

TBR expects consumers to continue to remain lukewarm towards HP’s Windows 8 notebook and tablet offerings while revenues in the x 86 markets will shrink to $114 billion worldwide this year and $109 billion in 2014 as vendors compete on pricing.

“HP is being pulled in opposite directions as it seeks to re-establish momentum in the consumer PC markets which has a lower margin, while protecting its more lucrative enterprise customer base,” said Narcotta.

For instance, while HP added Chrome OS and Android device to its portfolio, he said, growth in this space will be limited throughout the year as manufacturers from the Asia Pacific region flood the market with cheaper alternatives. Demand for HP’s Slate 7 tablet and Pavilion Chromebook will be muted as Asus’ Nexus 7, Samsung’s Galaxy Tab and Apple’s iPad Mini overshadow HP’s products.

 

 



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