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Hewlett-Packard, NEC Collaborate

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Hewlett-Packard Company (HPQ) or H-P and NEC Corporation recently joined forces to deploy software-defined networking (:SDN) aided infrastructure to deliver enhanced performance for networking customers.

Software-defined networking is an approach to networking in which control moves from hardware to a software application called a controller. A network administrator uses these controllers to direct and regulate network traffic from a centralized hub. Another important factor for choosing SDN technology is that it is applicable for both private and public cloud infrastructures.

This open standards-based SDN is expected to offer a more flexible, efficient and improved networking solution. The companies are expected to benefit from this new technology with a flexible yet affordable solution that is likely to meet growing business needs.

NEC Corporation is one of the leaders in the integration of IT and network technologies that meet the complex needs of its customers. With this partnership, Hewlett-Packard will enrich its virtualization, automation and cloud-based portfolios.

The NEC Virtual Tenant Network (VTN) application will be of immense importance since the joint effort will ward off difficulties while setting up a matured virtualized cloud-based infrastructure. This is turn will help H-P to expand its existing networking-based infrastructure with the benefits of the NEC VTN application.

As per the survey conducted by open-source systems management provider Zenoss, SDN will gain momentum in 2014. Moreover, virtualization and cloud computing technologies will remain significant growth areas in enterprise IT environments. Based on this, we believe more clients will be inclined to deploy flexible networking infrastructure, thereby paving the way for strong revenue growth.

Moreover, H-P’s growing focus on new business segments, such as electronic medical records, cloud computing and the recently-added analytics segment will help it grow in the ensuing quarters.

Nonetheless, competition from Computer Sciences Corp. (CSC) in the Medicaid service space, weak PC market and a sluggish macroeconomic environment remain headwinds. Also, competition from other technology providers such as International Business Machines (IBM) and Salesforce.com (CRM) makes it even more difficult to gain market share in the cloud and security space.

Currently, H-P has a Zacks Rank #2 (Buy).

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