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HP storage results borked by bleeding currency rates

Revenues rose but infernal currency rates turned it into a fall

With its latest results, HP's third-quarter storage revenues went down 2 per cent on the annual compare, not being pulled up by industry standard servers' revenue which rose 8 per cent. But at constant currency – ignoring foreign exchange rate changes over the year – they rose 7 per cent.

The Enterprise Group's revenues were $7bn, of which storage contributed $784m. It was $796m in the equivalent quarter a year ago.


HP storage product revenues to Q3 fy2015

The decline continues HP storage product's dismal trend you would think, but it is a currency rate artefact. HP also finally achieved crossover, with newer converged storage (think 3PAR) revenues of $393m exceeding traditional (think EVA) storage product revenues of $391m. It's been a slow haul and makes us realise just how tenacious installed base product revenue flows can be – a fact that has not escaped NetApp.

Stifel Nicolas MD Aaron Rakers puts the storage result in context, writing in clipped financial analyst language: "$784m was -1.5 per cent y/y; +7 per cent y/y in constant currency (CC) versus EMC’s +1 per cent/-2 per cent y/y in CC with adjustment for VCE; NetApp at -6 per cent y/y in CC. Converged Storage revenue at $393m was +8 per cent y/y (+18 per cent in CC); now +50 per cent of HP’s total storage revenue. EVA + 3PAR + XP storage revenue was +13 per cent y/y in CC."

Rakers also noted: "IBM reported storage down 10 per cent y/y (and -4 per cent in CC) in 2Q15."

So HP is doing comparatively better than EMC, IBM and NetApp with its storage portfolio. That's encouraging.


Converged storage product revenues vs traditional storage product revenues

Hopefully, once the separation from the printers and PCs part of HP is complete, the new-fangled Hewlett-Packard Enterprise will get its storage act even more together and start motoring faster still. ®

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