Recently, Hewlett-Packard Company HPQ announced an update to its Helion portfolio, a cloud-based collection of products and services designed to facilitate the movement of enterprise workloads to the cloud.
The new HP Helion CloudSystem 9.0 and the upgrades to its HP Helion Managed Cloud Services are aimed to meet the growing demand for cloud services.
The new cloud platform is designed to make the cloud-computing environment simpler, flexible, efficient and cost effective. HP Helion CloudSystem 9.0 incorporates the HP Helion OpenStack and the HP Helion Development Platform that help organizations to develop, manage and deploy cloud-based applications and infrastructure securely.
Per the announcement, VMware, Inc.’s VMW enterprise-class virtualization technologies, Microsoft's MSFT Hyper-Vand and Red Hat RHT KVM will be supported by HP’s Helion CloudSystem 9.0 services.
We believe that the adoption of these solutions will enable the company to offer an efficient and improved hybrid IT environment. We also believe that the deployment of these solutions will boost H-P’s Software solutions portfolio and act as a tailwind for its near-term financial performance.
The cloud computing market, according to Gartner, will grow at a CAGR of 62% to $160 billion from 2012 to 2015. Moreover, the research firm also predicts that the cloud-based security services market will rise to $3.1 billion in 2015 from $2.1 billion in 2013. Cloud computing leads to improved services and elevated security requirements for companies that use it, so H-P’s product portfolio positions it well to tap the opportunity.
Additionally, according to H-P, 40% of its cloud users have adopted the hybrid cloud as a part of their operational strategy, and by 2016, around 75% of IT executives propose to adopt this cloud-solution to improve services and enhance security for IT-enabled expansion. We believe that this new offering is ideal for companies that have an extensive IT infrastructure, which requires a certain level of compliance and enterprise integration.
The company’s traction in the cloud, security and big data segments are the other positives. Its strategic focus on the software business will help it to achieve long-term profitability. However, continuing macroeconomic challenges, tepid IT spending and competition from International Business Machinesand Oracle are the near-term headwinds.
Hewlett-Packard carries a ZacksRank #3 (Hold).
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