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December 10, 2012
Public Cloud Offering Debuts to Mixed Reviews
The Reports of HP's Death Are Greatly Exaggerated 

 

Last week, HP announced general availability of its public cloud offering, which had been in public beta for the last seven months. Predictably, both HP detractors and supporters asked: can the company compete?

 

Amazon Web Services (AWS) is the undisputed leader in the market with annual revenue expected to reach $1.5 billion this year. Rackspace is a strong #2 in terms of paying customers.

 

HP's current woes are well known: a series of abrupt management changes, years of underinvestment in R&D, and two back-to-back $8 billion-plus write-offs of the failed acquisitions of EDS and Autonomy - just to name a few.  

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On the news of the Autonomy write-off, HP's stock - already at an all time low - fell another 12.4% to $11.65. As of today, December 10th, it's back up to $14.16, but it has a long way to go to reach historic levels.

 

One criticism of HP's new cloud offering is that is relies on technology developed elsewhere, starting with OpenStack open source cloud computing software. 

 

But here's the thing: HP's strongest core competency today lies in services and its strong relationships with enterprise customers. In today's market, that can be just as valuable - if not more so - than homegrown products.

Just one example is long-time HP customer DreamWorks Animation, which adopted HP's first cloud-computing solution five years ago and has stuck with the company.

 

As martinwolf M&A Advisors President and Founder Marty Wolf was
quoted by GigaOM in a post on HP's cloud offering: "The saving grace for traditional tech companies is if they don't have IP and recurring revenue, they still have a chance to create value if they aggregate customers and give them more solutions - not products per se."
 
With strengths like that, and under the leadership of new CEO Meg Whitman, to paraphrase Mark Twain, "The reports of HP's death are greatly exaggerated."
 

To read the entire GigaOM post on HP, click here.


To learn more about martinwolf contact Matthew Putzulu at mputzulu@martinwolf.com.  

About martinwolf    

 

     San Ramon Office          
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With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with IT services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

   

November 6, 2012

Rolta, through its subsidiary Rolta International, Inc. announced that it acquired AdvizeX Technologies, LLC, a US company providing a comprehensive set of IT products and services ranging from roadmap planning to cloud-computing implementation strategy. With the acquisition, Rolta is now one of the top national partners of Oracle, Microsoft, HP, EMC and VMware in the US. Rolta was represented by martinwolf in the transaction. 

Please click here to view the announcement.

 

June 15, 2012

glendonTodd Capital LLC announced that it acquired Aztec Systems, a leading provider of enterprise technology solutions to hundreds of U.S. middle-market companies. Aztec was represented by martinwolf in this transaction. Aztec, a member of Microsoft's Presidents Club, was recently ranked 27th in revenue on Bob Scott's 2012 Top 100 VARS list and serves more than 700 middle-market clients. Terms of the transaction were not disclosed. Please click here to view the announcement.

 

December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   

 

 

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________________  

 

"I could not be more confident about [HP's] future."

 

- Jeffrey Katzenberg

 

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