Full disclosure - I worked as a marketing director in the HP storage business from 2007 to 2011 and still own some HP stock.
Jean-Jacques Maleval recently wrote an article for Storage Newsletter entitled "HP: Fiscal 2Q14 Financial Results - When fall will stop in storage business?" In the article he expresses little confidence in the optimism Meg Whitman has for a turnaround in HP storage, and he shares the table at the bottom of this post.
It is clear to see that HP Storage revenue is in decline over the last two years but this is not a short term trend there has been little growth in the last 4 years. Now it was of course 4 years ago that with Dave Donatelli at the helm, HP acquired 3PAR in a bidding war with Dell. As recently as January this year Business Insider hailed 3PAR as one of HPs most succesful acquisitions and by some metrics it has been. However when you look at the overall goal for HP as a portfolio company they have failed to capitalize on 3PAR to rapidly grow the overall storage business and I would also venture to suggest that it has not helped in an appreciable way the other enterprise businesses either.
HP believes that Converged Systems portfolios incorporating 3PAR and other HP storage technologies will drive more revenues over time. I am inclined to agree with them but here is the rub. They were arguably further ahead with converged systems before the 3PAR acquisition. 3PAR may be great storage technology, but it was a reset for HP convergence plans and that time lapse let new market entrants like Nutanix and larger organizations such as Cisco (Partnering with EMC) to get a foothold that they should not have had the opportnuity to get. HP had a leading server market position that it could capitalize on to drive time to market for convergence. I wrote the HP Analyst presentation for their 2008 analyst meeting all around this.
Dave Donatelli saw an opportunity to revamp the HP Storage business but the refocus of the storage business on 3PAR did not allow HP to capitalize quickly enough on HP server leadership to drive convergence leadership. The 3PAR acquisition initially drove a wedge between the Server teams, who had some excellent storage technology, and the Storage teams who were building all of their products on servers, but not necessarily ProLiant. At a time when the technology was more converged than ever the teams were further apart.
I believe that Meg Whitman is fixing this issue and that HP has a very solid focus on converged systems. But, howerver succesful the growth of the 3PAR product line is, it must be judged by the overall impact on HP. Dave Donatelli made a bold move with the 3PAR acquisition, but may ultimately have paid the price for the lack of overall Enterprise product growth when he left HP earleir this year after being replaced in the Enterprise Systems role. Remember at the time of the 3PAR acquisition, which coincided with Mark Hurd leaving HP, Donatelli was a rising star. Time will tell if HP can make up ground it ceeded to competitors in the converged systems market and fully realize the potential of the 3PAR acquisition. That potential though can not be simply about storage and certainly not only 3PAR.
Note: HP is promising more news on Backup, Recovery and Archiving at HP Discover.
HP Revenue for storage only (without services, $ million)
| Quarter | Revenue | Q/Q Growth |
| 1Q13 | 833 | -12% |
| 2Q13 | 857 | 3% |
| 3Q13 | 833 | -3% |
| 4Q13 | 952 | 14% |
| 1Q14 | 834 | -12% |
| 2Q14 | 808 |
-3% |
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