Hewlett Packard Enterprise (HPE) reported results for its second fiscal quarter of 2018 that were its fourth consecutive quarter of growth. Strong sales in storage, hyperconverged infrastructure (HCI), and Aruba products drove revenue growth. The company also saved about $83 million through the first half of fiscal 2018 though its HPE Next cost-cutting initiative.
Overall revenues grew 10 percent from a year ago to $7.5 billion.
Compute revenues increased 6 percent year-over-year. This includes HPE’s SimpliVity HCI and Synergy composable infrastructure products. HPE CFO Tim Stonesifer cited triple-digit HCI growth and said Synergy gained “increasing customer traction.”
Just last week HPE acquired Plexxi and said it will soon integrate the startup’s software-defined data fabric networking technology into its HCI and composable infrastructure products.
“With Plexxi, we will enable customers to move and manage their data more quickly and effectively and also significantly reduce CapEx and OpEx by up to 50 percent in some cases,” said HPE CEO Antonio Neri on the conference call with investors.
Earlier this month the company rolled out its updated Nimble Storage platform, which supports Storage Class Memory (SCM) and NVMe for super-fast, low-latency flash. HPE also guarantees it provides the most capacity-efficient all-flash array on the market.
“While the overall storage market remains competitive, we like our current position and expect to take nearly 50 basis points of share this quarter, which will be the 10th time in the last 12 quarters where we’ve gained or maintained share,” Stonesifer said.
Additionally, HPE Aruba product revenue (up 18 percent) and service revenue (up 10 percent) both saw strong growth.
The company also raised its third-quarter earnings forecast to between 35 and 39 cents per share and its full-year estimates to between $1.40 to $1.50 per share, up from earlier guidance of between $1.35 to $1.45 per share.
HPE Next, the company’s plan to net upwards of $800 million of cost savings over three years, also boosted its bottom line. This initiative aims to streamline operations and simplify the company’s product portfolio. It also involves job cuts.
In his second earnings call since he took over from former CEO Meg Whitman in February, Neri said HPE Next is on track to deliver $250 million in net savings for the year. About one-third of this has already been realized in the first half of fiscal 2018. The remainder will come in the second half.
Neri, who architected HPE Next, continued to champion initiative — and insist it’s about more than just cost savings. “It’s all about simplification, innovation, and execution,” he said on the conference call with investors. “I believe that HPE Next will be a competitive differentiator for us because one of the challenges we see in this industry with all the acquisitions, mergers, and whatnot is the ability to provide an integrated experience.”
The company is entering HPE Next’s “second phase,” he said. Phase two “is the transformation in the processes and IT modernization, which actually will give us the incremental step forward on executing even better and more simply in front of the market opportunity.”