(Bloomberg) Hewlett Packard Enterprise Co., which makes server computers and sells more than half of its products online, will begin to reap returns from its largest current investment before the end of a four-year commitment, CEO Antonio Neri said.
Palo Alto, California-based HPE committed $4 billion through 2022 to the Intelligent Edge, a patchwork of initiatives meant to accelerate the company’s artificial intelligence, internet of things and distributed computing offerings. Neri has linked the business to HPE’s relatively fast-growing networking arm, Aruba Networks, as one way to diversify the company from a server market that’s cyclical and a storage hardware market that’s shown signs of stagnation.
“We will see a return on that investment over the next two years,” Neri said Monday in a taped interview with Bloomberg Television. “This is a business that’s really growing fast. In fact, we’re growing the business double digits.”
HPE sells about 50% of its products through e-commerce, it says. That includes products sold by its Enterprise Online Store, where buyers can configure and order large complex systems like network servers with multiple blades or server modules for computing and data storage; and its Parts Storefor ordering replacement parts. HPE also provides an online marketplacewhere buyers can view information on HPE products and click to the e-commerce sites of resellers and other channel partners to purchase products and services.
At a conference in Madrid on Monday, HPE announced Composable Cloud, a hybrid platform that will use AI software to allow customers to connect data on HPE hardware with data stored in public clouds from Amazon, Microsoft and others. “Cloud is not a destination,” Neri said. “It is an experience and we need to compose our cloud to the specific workloads.”
After missing out on cloud-computing services that are driving growth in information technology, HPE is turning to the Intelligent Edge as its last best hope to power sales through the next decade. What the company won’t be doing is buying revenue through mergers and acquisitions, Neri said, rather it will seek deals for intellectual property and talent.
Despite a ripple of consolidation among software companies this year, Neri said he views the high tech valuations as limiting M&A among hardware companies.
“Valuations have to make sense, and at this point, I think valuations are a little high,” he said. “That’s why we see a little bit of correction going on in the market. At this point in time, our focus is really on execution.
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