Top 100: HP balances traditional IT with emerging tech
Hewlett-Packard Co. is navigating the market with a balancing act that includes supporting traditional IT and moving customers to emerging technologies. Oh yeah, the company is splitting in two at the same time.
Probably the biggest news to come out of Hewlett-Packard in 2014 was its plan to split into two companies, but that announcement shouldn’t eclipse other progress HP made last year.
For instance, fiscal 2014 was the third year of a five-year turnaround effort and the first that stabilized the Palo Alto, Calif.-based company’s revenue trajectory, according to its annual report. The company had revenues of $111.5 billion, down just 1 percent year-over-year.
For its federal business, HP captured the No. 6 spot on this year’s Top 100 with $3.9 billion in prme contracts.
The company’s success can be attributed to several factors, said Marilyn Crouther, senior vice president and general manager of the U.S. Public Sector at HP Enterprise Services. First is its ability to meet the demand for both new and conventional IT.
“We are helping our clients to run their traditional IT better, while bridging to cloud platforms that enable mobility, data analytics in a secure environment,” Crouther said.
She pointed to three major contract wins last year. One was a five-year task order worth up to $548 million from the Defense Department’s Defense Manpower Data Center. As the prime contractor, HP provides commercial hardware support services and software, maintenance and integration services.
In February 2014, the Homeland Security Department awarded HP a deal worth up to $32.4 million — the largest acquisition of software security assurance tools worldwide, Crouther said — under the DHS Continuous Diagnostics and Mitigation governmentwide blanket purchase agreement. Under the first task order, HP will provide software security product licenses for 33 federal civilian government agencies.
On the state and local side, the California Department of Corrections and Rehabilitation awarded HP a $116.5 million agreement to continue managing the Strategic Offender Management System.
Additionally, HP moved ahead with its work on the Navy’s Next Generation Enterprise Network, a $3.5 billion deal it won in 2013. In September, the company finished transitioning about 360,000 seats from the current contract to NGEN. Next up is evolving secure mobile access to network services, supporting the service’s move to cloud, using big data and analytics to advance cyber situational awareness, and enhancing existing capabilities while planning future network architecture, Crouther said.
Looking forward, the biggest challenge is the pending separation of the 75-year-old company, which is expected to complete by the end of October, when HP’s fiscal year also ends. The result will be two publicly traded companies: Hewlett-Packard Enterprise, which will focus on technology infrastructure, software, services and cloud solutions, and HP Inc., which will handle personal systems and printing devices. The driving force behind the split is enabling the two companies to hone their expertise and deliver products faster. HP Enterprise’s segment revenue in fiscal 2014 was $57.6 billion.
“This change will allow us a sharper focus on our government clients,” Crouther said. “We’ll be faster to innovate, more agile and better able to meet rapidly changing needs…. In order to propel organizations and missions forward, we must take advantage of the tremendous opportunities before us and embrace the new style of business.”
That speed will be helpful in a flailing marketplace, she said. IT spending remains flat, the discretionary budget will impede growth rates and policy changes are formidable obstacles, but she sees a potential for growth in cloud, mobility, analytics and security. Also, government’s greater openness toward using out-of-the-box solutions is improving the contractor market, Crouther added.
“The challenges our government clients face have never been greater – achieving deep spending reductions while meeting business and mission needs that continue to evolve,” she said. “Companies that use breakthrough tools, technologies and business practices to enable fast, cheap and high-quality service to clients will win.”