Hewlett-Packard Co. (HPQ) or H-P recently unveiled a host of new cloud solutions. Its new hybrid cloud solutions are capable of managing and connecting public and private clouds securely.
A hybrid cloud comprises two or more clouds (private, community, or public) that can be used both locally and off-site and offers the benefit of multiple operation models to its users. Through this new offering from H-P, organizations will now be better equipped to handle hybrid cloud technology as it will now be significantly easier for them to manage and control their business applications securely.
The new cloud platform incorporates the next generation of HP CloudSystem, the HP Hybrid Cloud Management Platform, HP Hybrid Cloud Design Professional Services and the new HP Public Cloud VPC, which is designed to make cloud-computing environment more simple, flexible, efficient and cost effective.
The cloud computing market, according to Gartner, is expected to grow at a CAGR of 62.0% to $160 billion from 2012 to 2015. Moreover, the research firm also predicts that the cloud-based security services market will rise to $3.1 billion in 2015 from $2.1 billion in 2013. Cloud computing leads to improved services and elevated security requirements for companies that use it and H-P’s product portfolio is well positioned to benefit from that.
Additionally, according to H-P, 40% of cloud users have adopted the hybrid cloud as a part of their operational strategy, and by 2016, around 75% of IT executives propose to adopt this cloud-solution to improve services and enhance security for IT-enabled expansion. We believe that this new offering is ideal for companies that have an extensive IT infrastructure, which requires a certain level of compliance and enterprise integration.
Apart from this, we remain optimistic about H-P’s strong business model, as well as its leadership position in both PC and Server segments. The company is also expected to benefit from an increase in IT spending and PC refresh cycles.
However, increasing competition from companies like Accenture plc (ACN), International Business Machines Corporation (IBM) and Oracle Corp. (ORCL'>ORCL) coupled with continuing macroeconomic challenges and tepid IT spending will pose challenges, going forward.
Currently, H-P has a Zacks Rank #3 (Hold).