Software, Cloud, Security
Software was one of the highlights of HP's quarter, with revenue rising 18% to reach $973 million, albeit thanks to a favorable year-over-year comparison. Moving forward, though, the tech giant's software numbers could look very different.
"The majority of growth was inorganically boosted by the acquisition of
The analyst also warned that HP's fiscal third quarter could be its last quarter of double-digit software growth.HP, which has been derided in the past for its "limited" software portfolio, has been highly vocal about its desire to boost this part of its business. Speaking during HP's third-quarter conference call, however, the company's CFO Cathie Lesjak acknowledged that macro challenges on both sides of the Atlantic and sales issues negatively impacted software license revenue, which grew just 2%. "We have a lot of work to do over the next several quarters to improve Autonomy performance, and we will be focused on improving pipeline conversions and execution across the entire software business," she added. TBR's Mirandi believes that HP could see software upside if it implements the correct strategy. "In coming quarters, HP Software has opportunities to grow in the quickly expanding cloud and security markets," she explained. "Prior to Autonomy, HP Software attributed growth to its security portfolio, namely ArcSight and Fortify, and TBR believes security remains a major revenue opportunity for the business. Public, private and hybrid cloud is also a key area in which HP Software can capitalize." On the conference call, Whitman promised new additions to the company's security portfolio during the fall. The CEO also pointed to the recent launch of HP's first public cloud services and the newly-enhanced version of its CloudSystem product, which lets enterprises and service providers create private, managed and public cloud environments. HP, she explained, has almost 750 CloudSystem customers.
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