Meg Whitman Leaves Slimmed-Down HPE

In a surprising move,

Net revenue was $7.7 billion, up 5% year over year, while organic net revenue grew 11%, excluding Microsoft contract and adjusting for currency. As Hewlett Packard Enterprise exits its low-margin, high-volume Microsoft contract, the firm expects a negative impact on the top line to linger well into fiscal 2019 and possibly early 2020. Servers revenue (excluding Microsoft) was up 6% in constant currency, thanks to contribution from the SGI acquisition and the Synergy product line. While storage revenue was up by 5% due to contribution from the Nimble acquisition, Hewlett Packard cited sales execution challenges with its 3Par product line in U.S. On the upside, networking grew at a very healthy 21% year-over-year rate thanks to Aruba. HPE noted Aruba was able to pull through wired networking products. While positive, we think Aruba’s wired portfolio is facing a serious challenge from Cisco’s newly released Catalyst 9,000 campus product line.

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