Sergey Nivens - stock.adobe.com
HPE has echoed the general theme in the market around the shift by customers to making more strategic, rather than reactive, technology decisions.
The firm shared its third-quarter numbers in an earnings conference call on 25 August, during which CEO Antonio Neri provided an update on the impact on the business of the ongoing move to the “new normal”.
“I spend probably 50% of my time talking to customers and partners, so I have a pretty good insight of what we see in the market. Right now...there are areas which are stronger than others,” he said.
“But the general sense is as follows. First of all, [customers are] looking to strengthen their operations, and therefore, IT plays a huge role with that, and IT resiliency is more important than ever. So, anything that comes with security and enables them to digitise their processes is on the growth side,” he added.
“Second...they have a lot of data, and they need to get insight from that data, and we see an acceleration of solutions related to AI [artificial intelligence] and machine learning,” said Neri.
Neri has been vocal about his belief that the shift to home working will remain permanent for a good proportion of the workforce, and said HPE was ensuring it had solutions to reach out to those customers around cloud, networking and security.
“Anything that preserves capex [capital expenditure] is also in high demand, and that’s why we see significant momentum with our HPE GreenLake Cloud services, because that’s a true conceived as-a-service offering,” said Neri.
He added that it had updated its offering at Discover in June with cloud services spanning machine learning operations, container management, virtualisation, infrastructure as a service, data protection and connectivity as a service, and those had gone down well with customers.
Overall, the customer base is emerging from the height of the pandemic at different speeds, which is posing a challenge for HPE and its partners.
“I would say the enterprise has been steady. Obviously, SMBE, from the customer segmentation perspective, is a challenge. When I look at the verticals, I think the financial sector is still very solid and the manufacturing side as well. Education, obviously, now is going to be very important. And the public sector is very strong,” said Neri.
HPE saw net revenues for the three months ended 31 July 2020 improve by 14% to come in at $6.8bn. Non-GAAP operating profit of $484m was up by 33% quarter on quarter.
The firm also reduced its backlog by more than $500m through improved supply chain execution, and is now expecting to hit normal levels by the fourth quarter of 2020.
“Navigating through the pandemic and planning for a post-Covid world have increased customers’ needs for as-a-service offerings, secure connectivity, remote work capabilities and analytics to unlock insights from data that are aligned to our strategy. We see a tremendous opportunity to help our customers drive digital transformations as they continue to adapt to operate in a new world,” said Neri.