HP revenue boosted by EDS service boom

HP's acquisition of EDS is beginning to pay dividends with the company growing its services revenue for the fourth quarter of 2009 by 8% to $8.9bn.

HP's acquisition of EDS is beginning to pay dividends, with the company growing its services revenue for the fourth quarter of 2009 by 8% to $8.9bn.

Francesco Serafini, senior vice-president and managing director, HP Europe, Middle East and Africa and Technology Solutions Group, said, "We have finally concluded the integration of HP with EDS and we are seeing services contribute significantly to the bottom line."

HP saw the biggest demand in its history for new outsourcing contracts in 2009. It signed a £700m 10-year deal with insurance group Aviva in February, which will see HP take over assets, operations and development at two Aviva datacentres in Norwich. "Outsourcing accounts for nearly 30% of the company's revenue," said Serafini.

Given the tough economic climate, businesses have been focusing on core competencies, and using outsourcing to offload non-core operations, said Serafini.

"We have been seeing demand for business process outsourcing. With EDS we can now offer customers the choice of designing their datacentres with HP hardware, outsource their datacentre, or run their business process."

He said HP's planned $2.7bn acquisition of 3Com boosts this strategy, allowing HP to offer datacentre products and services, including network infrastructure, enterprise storage through its StorageWorks range, Proliant and Integrity PC servers and Superdome and NonStop servers.

HP said infrastructure technology outsourcing accounted for $4.1bn of revenue. Technology services, application services and business process outsourcing reported revenue of $2.5bn, $1.5bn and $778m respectively.

For the rest of HP's business, the enterprise storage and servers (ESS) division reported total revenue of $4.2bn, down 17%. HP Software revenue declined 16% to $967m. Business Technology Optimization revenue declined 16% and the Imaging and Printing Group (IPG) revenue declined 15% to $6.5bn.

The Personal Systems Group (PSG) posted an increase of unit shipments of 8%, while HP Financial Services (HPFS) reported revenue of $726m, up 5% from the same period last year.

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