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HP storage results borked by bleeding currency rates

Revenues rose but infernal currency rates turned it into a fall

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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.

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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.

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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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