HP 2007 Annual Report Download - page 49

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements and the related notes
that appear elsewhere in this document.
OVERVIEW
We are a leading global provider of products, technologies, software, solutions and services to individual consumers,
small- and medium-sized businesses (“SMBs”), and large enterprises, including in the public and education sectors. Our
offerings span:
• personal computing and other access devices;
• imaging and printing-related products and services;
• enterprise information technology infrastructure, including enterprise storage and server technology, and software
that optimizes business technology investments; and
• multi-vendor customer services, including technology support and maintenance, consulting and integration and
outsourcing services.
We have seven business segments: Enterprise Storage and Servers (“ESS”), HP Services (“HPS”), HP Software, the
Personal Systems Group (“PSG”), the Imaging and Printing Group (“IPG”), HP Financial Services (“HPFS”), and Corporate
Investments. ESS, HPS and HP Software are structured beneath a broader Technology Solutions Group (“TSG”). While TSG
is not an operating segment, we sometimes provide financial data aggregating the segments within TSG in order to provide a
supplementary view of our business.
The operating framework in which we manage our businesses and guide our strategies is based on the disciplined
management of three business levers: targeted growth, operational efficiency and capital strategy. Although we have made
progress towards our goals in recent periods, there are still many areas in which we believe that we can improve. To
implement this operating framework, we are focused on the following initiatives:
• We are engaged in a process of examining every function and every business in the company in order to optimize
efficiency and reduce cost;
• We are in the process of consolidating 85 data centers worldwide into six state-of-the-art centers in three U.S. cities
and consolidating several hundred real estate locations worldwide to fewer core sites in order to reduce our IT
spending and real estate costs;
• We are reinvesting a portion of the cost savings from these initiatives by expanding our sales force and aligning our
resources in order to build our market share in emerging markets while expanding our coverage to drive growth in
mature markets;
• We are developing training programs for our sales forces designed to enhance our ability to provide solutions to our
customers and build customer loyalty;
• We are building and expanding our services organization to support our technology businesses and provide
comprehensive solutions to our customers;
• We are developing a global delivery structure to take advantage of regions where advanced technical expertise is
available at lower costs;
35