INVESTING TO
LAUNCH A NEW
ERA OF ENTERPRISE
SERVICES




June 1, 2010
1   ©2009 Hewlett-Packard Development Company, L.P
1...
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements that involve risks, uncertainties and ass...
IMPORTANT INFORMATION
Use of financial forecasts and projections
This presentation contains forecasts and projections of t...
INTEGRATION UPDATE
Closing the chapter
    Substantially completed    >100,000 employees integrated, >200 sites
    operat...
LEVERAGING PORTFOLIO LEADERSHIP TO
TRANSFORM ENTERPRISE SERVICES
– Plan to leverage HP technology and portfolio leadership...
MULTI-YEAR TRANSFORMATION
Leveraging power of the HP technology portfolio

                                          TRANS...
INTEGRATION PROGRESS VISIBLE IN MARGINS
EDS integration and margin improvement ahead of plan

                 SERVICES OP...
INVESTING TO DRIVE GROWTH AND
MARGINS
– $1 billion pre-tax restructuring charge to be taken against GAAP
  earnings and ex...
Imaging &
    Printing Group
          21%



                     Q&A
             Enterprise
             Storage &
    ...
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Investing to Launch a New Era of Enterprise Services

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Investing to Launch a New Era of Enterprise Services

  1. 1. INVESTING TO LAUNCH A NEW ERA OF ENTERPRISE SERVICES June 1, 2010 1 ©2009 Hewlett-Packard Development Company, L.P 1 The information herein is subject to change without notice.
  2. 2. FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected benefits and costs of the transformation of the Enterprise Services business; management plans relating to the transformation and the operation of the Enterprise Services business during and after the completion of the transformation; the expected timing of the completion of the transformation; the ability to complete the transformation considering the various risks and uncertainties associated with its execution; any other statements of the plans, strategies and objectives of management for future operations; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits of the transformation may not materialize as expected; that the transformation may not be timely completed, if at all; that, prior to the completion of the transformation, the Enterprise Services business may not perform as expected due to transformation-related uncertainty or other factors; that HP is unable to successfully execute on the transformation; and other risks that are described in HP’s Securities and Exchange Commission reports, including but not limited to the risks described in HP’s Annual Report on Form 10-K for its fiscal year ended October 31, 2009 and Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2010. HP assumes no obligation and does not intend to update these forward-looking statements. 2 June 1, 2010
  3. 3. IMPORTANT INFORMATION Use of financial forecasts and projections This presentation contains forecasts and projections of the potential impact of the multi-year transformation of HP’s enterprise services business on HP’s future financial results. Although sometimes presented with numerical specificity, these forecasts and projections are based upon a variety of estimates and hypothetical assumptions made by HP’s management. These forecasts and projections are subjective in many respects and thus susceptible to interpretation and periodic revision based on actual experience and developments occurring since the date the forecasts and projections were prepared. While HP’s management believes that these estimates and assumptions are reasonable under the circumstances, some or all of those estimates and assumptions may not be realized, and they are inherently subject to significant business and economic uncertainties and contingencies, and such uncertainties and contingencies can generally be expected to increase with the passage of time. Should any of the estimates and assumptions change or prove to have been incorrect, it could materially affect the ultimate accuracy of these forecasts and projections. For these reasons, the inclusion of these forecasts and projections in this Presentation should not be regarded as an indication that the forecasts and projections will be an accurate prediction of future events, and they should not be relied on as such. HP assumes no obligation and does not intend to update these forecasts and projections. Consultations with employee representatives For those countries that require consultation with works councils and other employee representatives in relation to the local implementation of any restructuring plans or organizational changes, these materials are not intended to provide country- specific information and in no way reflect final decisions at a local level. Where required by law, final decisions will be subject to prior consultation with works councils and other employee representatives. 3 June 1, 2010
  4. 4. INTEGRATION UPDATE Closing the chapter Substantially completed >100,000 employees integrated, >200 sites operational integration closed, > 400 IT applications retired Extended client > 25,000 total deals signed, relationships >270 new logos, >50 mega deals Expanded operating ~450 basis points of margin margins expansion in services from Q408 Improved client Client loyalty metric improved 4 percentage satisfaction points in fiscal 2Q10 versus 2Q09 Received strong external Leader in datacenter and utility services, validation communication outsourcing services, SAP outsourcing 4 June 1, 2010
  5. 5. LEVERAGING PORTFOLIO LEADERSHIP TO TRANSFORM ENTERPRISE SERVICES – Plan to leverage HP technology and portfolio leadership to enhance services capabilities • Enhance service levels and create new innovative offerings for clients • Consolidate, modernize and automate delivery infrastructure • Create more agile and streamlined organization – Plan to reinvest savings in growth while expanding margins • Increase sales coverage • Expand global delivery capability • Expect annual gross savings of $1 billion and net savings of roughly $0.5 billion to $0.7 billion by the end of FY13 5 June 1, 2010
  6. 6. MULTI-YEAR TRANSFORMATION Leveraging power of the HP technology portfolio TRANSFORMATION Modernize Invest & Grow • Fully automated, standardized, • Deliver innovative service offerings state-of-the art data centers and • Expand global delivery capability toolsets and sales coverage • Reduce the number of commercial data centers • Private cloud infrastructure service and tools by roughly half • Desktop-as-a-service • Transform clients to HP Converged Infrastructure • Expect to add ~6,000 positions in sales and and management software delivery • Once completed, ~9,000 positions expected to be eliminated over a multi-year period as we automate & modernize delivery infrastructure 6 June 1, 2010
  7. 7. INTEGRATION PROGRESS VISIBLE IN MARGINS EDS integration and margin improvement ahead of plan SERVICES OP MARGIN 16% 15% OPERATING MARGIN GUIDANCE 14% GIVEN AT SEPTEMBER 2008 ANALYST MEETING 13% 12% FY10: 1 – 13% 1% 11% Timeless: 13% – 15% 10% H208 H109 H209 H110 7 June 1, 2010
  8. 8. INVESTING TO DRIVE GROWTH AND MARGINS – $1 billion pre-tax restructuring charge to be taken against GAAP earnings and excluded from non-GAAP earnings over a multi-year period • Charge relates to severance, asset impairment, etc. over multi-year transformation period • Only half of the charge to be accounted for in Q3’10 and balance over remaining transformation period – Compelling expected return on investment • Estimated annual savings by the end of FY13 of $1 billion, with $0.5 billion to $0.7 billion expected flow through to pre-tax earnings 8 June 1, 2010
  9. 9. Imaging & Printing Group 21% Q&A Enterprise Storage & Servers 13% 9 June 1, 2010
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