HP 2010 Annual Report Download - page 45

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
core sites in order to reduce our IT spending and real estate costs. We are also continuing to
implement the restructuring plan announced in the fourth quarter of fiscal 2008 to optimize the cost
structure of our Services business and the restructuring plan announced in May 2009 to structurally
change and improve the effectiveness of several of our product businesses. In June 2010, we announced
and started implementing a new restructuring plan that will consolidate data centers, systems and tools
to better position for growth our enterprise services business, which includes our infrastructure
technology outsourcing, application services, and business process outsourcing business units. See
Note 8 to the Consolidated Financial Statements in Item 8 for further discussion of these restructuring
plans and the associated restructuring charges.
Investing for Growth
We are investing for growth by strengthening our position in our core markets and accelerating
growth in adjacent markets in anticipation of market trends, such as data center consolidation and
automation, cloud computing and virtualization, digitization, IT security, and mobility and connectivity.
For example, we are increasing our sales coverage and investing in our sales channels to better address
the markets we cover, including further expansion in emerging markets. We are creating innovative new
products and developing new channels to connect with our customers. In addition, we have been
making focused investments in innovation to strengthen our portfolio of products and services that we
can offer to our customers, both through acquisitions and through organic growth. A critical component
of this strategy was our acquisition of Electronic Data Systems Corporation (‘‘EDS’’) in August 2008,
which has increased the size and breadth of our services business and enabled us to provide
comprehensive IT product and services solutions to our customers. In addition, with the completion of
the acquisition of 3Com Corporation (‘‘3Com’’) in April 2010, we are accelerating our investments in
networking. In July 2010, we completed the acquisition of Palm, Inc. (‘‘Palm’’), which enhances our
ability to participate more aggressively in the growing smartphone and connected mobile device
markets. In September 2010, we completed the acquisition of 3PAR Inc. (‘‘3PAR’’), which expands our
storage portfolio into enterprise-class public and private cloud computing environments. In October
2010, we completed the acquisition of ArcSight, Inc. (‘‘ArcSight’’), which enables us to offer customers
an integrated security platform with a holistic approach to securing their networks, applications and
sensitive data. These acquisitions have enabled us to expand in high-margin and high-growth industry
segments and have further strengthened our portfolio of hardware, software and services.
Leveraging our Portfolio and Scale
We now offer one of the IT industry’s broadest portfolios of products and services, and we
leverage that portfolio to our strategic advantage. For example, in our enterprise business, we are able
to provide servers, storage and networking products packaged with services that can be delivered to
customers in the manner of their choosing, be it in-house, outsourced as a service via the Internet or
via a hybrid environment. Our portfolio of management software completes the package by allowing
our customers to manage their IT operations in an efficient and cost-effective manner. In addition, we
are working to optimize our supply chain by eliminating complexity, reducing fixed costs, and leveraging
our scale to ensure the availability of components at favorable prices even during shortages. We are
also expanding our use of industry standard components in our enterprise products to further leverage
our scale.
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