Hawlett-Packard Co. has reported a decline in Enterprise Group revenue by 9% also at the same time the shares of the company also dropped. The company’s CEO Meg Whitman is planning to provide the enterprise computing services and transform the company by taking on IBM and Cisco Systems Inc.
The unit performance was very disappointed due to which on Wednesday Dave Donatelli was replaced with Bill Veghte by Whitman at the helm of the Enterprise Group. Also, she noticed a persistent decline in the sales of computers as more people are now get attracted towards tablets and smartphones. This decline has let her to backpedal from her statement which she gave in May that they could still achieve the 2014 revenue growth.
“What has changed about 2014’s outlook are a couple of things – Enterprise Group’s performance especially during the quarter,” she told analysts on a conference call. “Weak execution has amplified the market challenges we know exist. It’s unlikely … that we’ll see the growth in 2014 that I had hoped.”
For the past two years, the Silicon Valley stalwart under Whitman has been facing a radical reshaping, is struggling with weak IT spending worldwide. The company is facing a decline in sales and poor product execution. Moreover, the demand for the industry-standard servers, which are major part of its corporate business hardware, has weakened.
Donatelli, once considered for a position of CEO, gave up his post as the chief of the unit that sells servers and other software services to the organization. According to the company, he was asked to seek out the investment early stage technologies. Whitman is seeking a major transformation as according to her the computing giant is back in the market.
Veghte took over the position as the head of the division immediately and the position as chief operating officer will not be replaced. Veghte has spent 20 successful years at Microsoft Corp and in 2010 he joined HP.
“He’s going to be looking at the segment through a different lens,” said Shebly Seyrafi, an analyst at FBN Securities. The owners of the company are working continuously in reviving the company from the years of a broad turmoil. The company faces a decline in revenue in the fiscal third quarter from $29.7 billion a year earlier to $27.2 billion.
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