HP 2009 Annual Report Download - page 3

In the HP Enterprise Business (EB), our product
businesses also had to adapt to the market
environment across the portfolio of software,
servers, and storage, while continuing to deliver for
ourcustomers.Ourindustry-standardx86servers
performed particularly well. We gained market
shareandenjoyedastrongrolloutofournewG6
server, which offers improved performance, a very
attractive return on investment, and meaningful
innovations in heating, cooling, and energy use.
The biggest story in EB, however, was in Services.
Throughout fiscal 2009, we benefited from the more
stable revenues associated with Services, which
has now become our most profitable segment.
We worked hard on the integration of EDS,
retained 199 of the 200 largest EDS accounts,
and increased customer satisfaction. Today, we
face the marketplace as one company with a more
competitive cost structure and a significant number
of new customers. Services is well positioned to
compete, win, and grow.
A disciplined multi-year strategy
AtHP,we’vebeenexecutingadisciplined,multi-
year strategy, building the company through
careful analysis of our operations and portfolio, the
competitivelandscape,andthelong-termforces
shaping our industry and the world. This process
beganwiththebuild-outofourindustry-standard
hardwareofferingsintoscaled,market-leading
positions from the desktop to the data center.
We then pioneered the area of automation and
management software to optimize and differentiate
our hardware in the marketplace. And then, with
EDS,weacquiredabest-in-class,globallyscaled
service provider to meet customer needs more
effectively as technology is increasingly delivered
through a services model.
Since2004,wehaveinvestedmorethan
$17billioninresearchanddevelopment
and$20billioninacquisitionstobuildthebest,
most comprehensive portfolio in the industry.
The recent announcement of our intent to acquire
3ComCorporationexempliesHP’sforward-
lookingfocus.3Comhasoutstandingtechnology
that complements our existing offerings, and,
when completed, the acquisition will expand HP’s
presence in the important networking segment.
A future of converged infrastructure
Increasingly, we expect that traditional technology
silos such as servers, storage, networking, and
software will begin to converge into infrastructure
that is optimized to meet customer needs. The
converged infrastructure will be differentiated
withvalue-addedsoftwareanddeliveredthrough
servicesanywaythecustomerwantsit—in-house,
outsourced,cloud-based,orthroughahybrid
environment that balances cost, security, and
performance across multiple models.
NoothercompanyisaswellpositionedasHPto
drive this evolution in the marketplace or deliver
on its potential. HP’s supply chain is the largest
in the industry and provides tremendous leverage
across our hardware portfolio. For example, the
supply base shared between our industry standard
servers and PCs has helped HP to change the server
marketplace, introducing better performance at a
lower cost. Industry standard servers are now the
fastest-growingserversegment,andHPleadsthe
category. We expect to replicate that success in
other data center adjacencies such as storage and
networking. In addition, HP can use its software
competencies to develop innovative solutions on top
ofindustry-standardhardware,deploythembroadly,
and use the power of our supply chain to capture
shareinhigher-margincategories.