Hewlett Packard Enterprise's New Strategy Is a Two-Edged Sword
Putting it bluntly, Hewlett Packard Enterprise (NYSE: HPE) isn't what it used to be. At one point it was a powerhouse in the business computing arena. But the advent of cloud computing made it much easier for other technology companies to enter the tech-services fray.
Hewlett Packard Enterprise did respond to the shift, for the record. After splitting with its consumer-oriented computer and printing division (now called HP) in 2015 so each arm could better focus on its particular customers, Hewlett Packard Enterprise has continued to narrow its focus. Of the fiscal fourth quarter's $7.2 billion worth of revenue, nearly 80% was driven by hybrid IT products that unite public and private cloud computing solutions. In the meantime, the company has drilled even further into the hybrid IT arena with its considerable R&D work on the "edge computing" front, where physical hardware meets digital data. It now plans on selling this hardware and software combination on a subscription basis, making it even easier for information technologists to purchase the tools they need.
The challenge for investors is that the company's growth is expected to stabilize in the low single digits for the next three years. And even then, there's not much of a defensive moat around the hybrid IT and edge computing technologies Hewlett Packard Enterprise has developed and now doubled down on.
Source Fool.com
