How will Hewlett-Packard's enterprise software stack up against competitors?

By Chris Lau for Kapitall.

Shares of Hewlett-Packard (HPQ) are tearing upwards. Since bottoming in the low $20’s last October, the stock hit a high of $35 before pulling back recently to $33.91. While concurrently making strategic moves to strengthen its PC business, HP is settling its legal battles to lower uncertainty for the company.

HP reportedly settled shareholder suits related to its expensive acquisition of Autonomy. When HP bought Autonomy, it paid $11.1 billion, only to write down nearly $9 billion. HP, along with the shareholder attorneys, will now go after Autonomy executives, notably former CEO Mike Lynch.

Autonomy still strategic

Though the sale price HP agreed to for Autonomy was excessive, enterprise software in the Big Data space offers substantial growth in the next decade. One need only look at Tableau Software (DATA) and Salesforce.com (CRM) to appreciate how important analytics and cloud software are in the enterprise software space.

Tibco Software (TIBX) is struggling to boost sales for Spotfire, and so are its shares. IBM (IBM) is also developing Watson software as an enterprise solution.

Conclusion

HP has yet to report stellar growth for Autonomy software. Still, it is clear that enterprise management solutions for IT, legal and compliance, and marketing divisions offer investors potentially good returns over the next few years.

With the way HP shares moved up in the last year, investors are already betting HP’s enterprise growth will succeed.

Disclosure: Author holds a position in Tibco Software.

Who do you think will outperform in the enterprise software space? Use the links below to start your own analysis.

Click on the interactive chart to view data over time. 

 

1. Salesforce.com ( CRM, Earnings, Analysts, Financials): Provides customer and collaboration relationship management (CRM) services to various businesses and industries worldwide. Market cap at $38.38B, most recent closing price at $63.91.

 

 

2. DATATRAK International, Inc. ( DATA, Earnings, Analysts, Financials): provides various business analytics software products in the United States, Canada, and internationally. Market cap at $6.01B, most recent closing price at $98.73.

 

 

3. Hewlett-Packard Company ( HPQ, Earnings, Analysts, Financials): Hewlett-Packard Company offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap at $57.06B, most recent closing price at $29.92.

 

 

4. International Business Machines Corp. ( IBM, Earnings, Analysts, Financials): Provides information technology (IT) products and services worldwide. Market cap at $196.75B, most recent closing price at $183.45.

 

 

5. TIBCO Software Inc. ( TIBX, Earnings, Analysts, Financials): Provides middleware and infrastructure software worldwide. Market cap at $3.45B, most recent closing price at $21.47.

 

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

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