HP 2008 Annual Report Download - page 43

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
customers 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 for financial reporting purposes: 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 reported collectively as 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 within which we manage our businesses and which guides our strategies
is based on the disciplined management of three business levers: targeted growth, operational efficiency
and strategic deployment of capital. 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 have substantially completed the consolidation of our 85 data centers worldwide in existence
prior to our acquisition of Electronic Data Systems Corporation (‘‘EDS’’) into six state-of-the-art
centers in three U.S. cities;
• We are consolidating several hundred real estate locations worldwide to fewer core sites in order
to reduce our IT spending and real estate costs;
• We are aligning our resources and reinvesting a portion of the cost savings from these initiatives
to build our market share in emerging markets and to expand our sales 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;
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