HP's Business Critical Revenue Drops amid Uncertainties with Itanium

From X-bit Labs: Hewlett-Packard, the world's No. 1 maker of servers, said on Thursday that sales of its mission critical servers based on Intel Corp.'s Itanium processors declined year-over-year. HP's customers delayed installations as a result of Oracle's decision to cease support of Itanium and uncertainties caused by the demarche. Nonetheless, HP believes that there is a bright future for its business critical systems (BCS) business.

"Revenue in business critical systems declined 9% year-over-year. This decline is sharper than expected as our ability to close deals has been impacted by Oracle's Itanium decision and orders are being delayed or canceled. We are working diligently to enforce the commitments that Oracle has made to our customers and to HP," said Catherine Lesjak, chief financial officer of HP, at the quarterly conference call with financial analysts.

According to HP's financial statement, the company's business critical systems division earned $486 million in Q3 FY2011, down 9% from the same quarter a year ago and down 13.2% from $560 million in Q2 FY2011 (it is necessary to note that HP performed changes to some of its accounting methods and added networking to its enterprise servers and storage division).

Companies, who use mission critical servers, are usually very large and their datacenters may cost tens or hundreds millions of dollars. Naturally, they do not deploy systems that can become obsolete if their software is out-of-date. But HP believes it can deal with uncertainties about the future of Itanium.

"In business critical systems, we firmly believe that HP Itanium-based server platform is by far the best in the industry, and we are fully committed to its future. In fact, it is the strength of this platform that is likely behind all those approach to drive customers away from HP technology. We are doing everything we can, including pursuing legal actions, to protect our customers and our business against all anti-customer behavior.

View: Article @ Source Site