23 Aug 2012, Dan Worth , V3
Another quarter, and here comes another poor financial performance from HP after it posted losses of $9bn, although it can at apparently blame part of this on a write-down for its acquisition of Electronic Data Systems (EDS) back in 2008.
However, behind this attention-grabbing figure, there were even more worrying signs for HP, with numerous areas of its business groups haemorrhaging cash as sales slumped.
Revenue was down 10 percent within the Personal Systems Group (PSG), for example, with both business and consumer sales slumping. Desktops declined six percent, notebooks 12 percent and total units were down 10 percent.
It's been well known that hardware sales are declining, particularly in the face of intense competition from tablets such as Apple's iPad, and the figures underline the scale of the slump. Perhaps Leo Apotheker was on to something after all.
However, it's not as if the other areas of the hardware business are holding up. The Enterprise, Servers, Storage and Networking (ESSN) division saw revenues down four percent, with each area of the unit, bar one, losing market share.
Only networking revenues were up – by six percent – which Forrester analyst Frank Gillett said was due to increased focus from HP on this area.
"HP has been aggressively investing in competing against Cisco but other areas are down because of economic stagnation and stronger competition," he explained to V3.
Principal software analyst at Ovum, Roy Illsley, told V3 that another reason for this increase could be that firms are starting to splash out on networking equipment that is IPv6 compatible as this issue rises on the IT agenda.
Elsewhere, printing revenues were down by three percent, and service revenues were down by the same amount, while IT Outsourcing services were, yes you guessed it, down, although this time by six percent.
However, there was one glimmer of hope for HP to cling to, and that was from its software unit, where revenues rose by an impressive 18 percent, a part of the business now boosted by the acquisition of Autonomy.
This revenue growth was due to rising sales in licences, up two percent, support growth of 16 percent and software service sales up 65 percent.
Clearly, Apotheker was on to something, as it was his decision to splash out some $10bn on Autonomy, and it appears businesses are lapping up HP's software offerings, with Autonomy's technology helping with this increase.
But it's too soon to know exactly how integral the Autonomy buy has been to bolstering HP's software figures, as HP didn't break out the details in its results, but Forrester's Gillett said it was likely this trend would continue.
"Software is increasingly important for managing infrastructure and information and will continue to grow faster than hardware," he explained.
However, Illsley said that for many firms, Autonomy's software offerings are still considered a "luxury", rather than a must have set of tools, but agreed this may change over time.
"Autonomy's vision deserves merit, and will continue to attract attention as more companies recognise the disruptive business insights and benefits locked away in an emerging tidal wave of unstructured data sources (such as social media)," he told V3.
"Here 'softer' notions of sentiment, meaning and relationships hidden within information can provide even deeper analytic insights than traditional hard-wired business intelligence tools."
So, perhaps there's some hope for HP looking to the future when it comes to software services, but on the hardware side it'll have to pull some impressive kit out of the bag, perhaps taking advantage of Windows 8, to improve its financial health.