Hewlett-Packard Co. (HPQ) recently announced that it will provide its Enterprise Applications Services for Workday, a leading provider of enterprise cloud applications for human resource management.
The partnership will help HPQ to standardize all its solutions for Workday applications and vice versa. The integration of HPQ’s solutions with that of Workday Human Capital Management (:HCM) will help HPQ clients deploy Workday techniques of human resource management, including building effective teams, taking faster employee-related decisions, preparing for future talent shifts within the organization, all of which have the potential to improve operational efficiency and reduce costs for clients. Hence, we expect adoption to be robust, boosting HPQ’s financial performance.
For Workday, the benefit is related to HPQ’s large customer base, which will now be able to deploy its solutions. Moreover, Workday Financial Management users will be able to take faster decisions on the basis of the payroll services, financial and operational performance data provided by Hewlett-Packard. Both these factors will help the company to increase its revenues.
Cloud technology is being increasingly adopted across businesses in order to innovate and drive growth. This strategic partnership will help both the companies to leverage each other’s resources to generate an innovative business model and technology application.
HPQ’s traction in the cloud, security and big data segments enhance its future growth prospects. Its strategic focus on the software business will help it to achieve long-term profitability.
However, continuing macroeconomic challenges, tepid IT spending and competition from International Business Machines (IBM) and Oracle (ORCL) are the near-term headwinds.
Currently, Hewlett-Packard has a Zacks Rank #3 (Hold). A better ranked in the technology sector is Micron Technology (MU), which carries a Zacks Rank #1 (Strong Buy).