Hewlett-Packard (HPQ) provided no evidence of cloud computing momentum during a Q3 2013 earnings call today. Even worse: CEO Meg Whitman scaled back HP's revenue expectations for 2014, suggesting that the company's turnaround plan is falling behind schedule. How should cloud integrators and HP's partners respond?
Talkin' Cloud's opinion: HP's earnings offered the latest proof that cloud computing and mobile computing are putting the squeeze on legacy technology giants.
The Facts and Figures
HP's overall Q3 2013 profits were slightly below Wall Street's expectations. CEO Meg Whitman deserves credit for stabilizing the company over the past year or so. But Whitman spooked investors when she predicted HP's 2014 revenues will not grow -- which represented an about-face from earlier statements.
During the earnings call, Whitman and HP CFO Cathy Lesjak also made vague statements about the company's cloud computing momentum. The cloud chatter offered no financial facts or figures -- which suggests to Talkin' Cloud that HP's SaaS and IaaS efforts are off to a mixed or weak start.
Numerous Words Say So Little
Among the cloud sound bites, Whitman said:
"We...expanded our Converged Cloud portfolio with a common OpenStack based architecture for HP's private, managed and public cloud offerings. And we announced the new partnership with Google to introduce a one-stop shop technology solution for small and medium-sized business customers."
Additional chatter included:
- Whitman: "HP's infrastructure leadership will help HP accelerate innovation in converged infrastructure, cloud and the emerging area of software-defined data centers."
- Whitman: "We continue to see improvements in signings but they are mostly renewals. Going forward we are focused on strengthening our go to market capabilities dedicated to strategic enterprise service solutions in areas like cloud, big-data and apps modernization and new account wins. As we outlined in October, this will be a multi-year journey."
- Lesjak: "Strategic Enterprise Services revenue continues to grow double digits driven by cloud, security, application modernization and big data solutions."
- Lesjak: "Software had a solid quarter with revenue up 1% year-over-year to $982 million. We are especially pleased with the continued performance in our strategic areas of cloud, security and big data."
- Lesjak: "Software will have a tough Q4 compare due to the large General Motors deal we noted last year. We still expect to see improved execution and strong customer demand across our big data, security and cloud offerings."
Bottom Line: HP Cloud Isn't A Factor Yet
Re-read each of those quotes above. They tell you nothing about the true performance of HP's own public cloud and HP's overall SaaS business.
And that's cause for concern.