Some of the most interesting conversations about HP and the technology business happen in public view during quarterly conference calls with financial analysts. Yesterday was no exception.
The full transcript is available on our investor relations website and Scribd, or check out our post yesterday for more coverage. Highlights from the call:
On the PC market and tablets:
Todd Bradley, EVP of the Personal Systems Group: There is bad business to chase in the PC market, if market share is your primary and your only goal. That's not what we're working on…
…You'll see us with a Microsoft product out in the near future and a Web-OS based product in early 2011.
Cathie Lesjak, CFO and interim CEO: HP networking…recorded organic growth of 42%, or total growth of 198% including 3Com, which was ahead of plan. In the last 90 days, we have seen significant interest in our HP networking data center solutions. 300 of our top 1000 customers have initiated proof of concept. Among the customers deploying HP networking solutions this quarter are Marriott, Dreamworks and the US Department of Health and Human Services.
…the recent acquisitions that we've closed and/or announced are very positive for margins. For example, a lot of the strength in our gross margin this quarter came from the networking business
Ann Livermore, EVP, Enterprise Business: The networking market has been one characterized by high prices, proprietary products and little choice, and now that HP's got the offering we have, we've just seen a very strong demand for the products…we're able to offer our networking products at a very attractive price and yet at the same time generate a very attractive margin…
On R&D and innovation
Cathie Lesjak: We have significant savings still to be captured in our services, supply chain and real estate initiatives. At the same time, we are increasing our investments in R&D and sales and marketing….
…I think what's important is to think about the fact that we've got three year plans out there. Three year plans that are supported by the Board, that include acceleration in both R&D and sales to drive growth…those investments are funded through the vast number of productivity initiatives…in flight already.
On security in the cloud and Fortify:
Ann Livermore: When you talk about applications and the cloud movement and the things happening there, the other thing that we announced this week which is very pertinent for that space is our acquisition of Fortified Software…as customers are moving more and more applications to the cloud, they are even more intensely concerned about testing for the security associated with applications and so that's a move that we made in that space that's very aligned with moving applications to the cloud and the whole security related to it.
(For a look into recent HP Labs research into cloud security models, read on about EnCoRe)