When you hear the letter combination HP, you quickly think of printers and PCs. But the company Bill Hewlett and Dave Packard started in a Silicon Valley garage in 1939 has been more than that for years. As of November 2015, there are officially two HPs: HP Inc. for well-known consumer and business hardware, and spin-off HP Enterprise, focused on business IT services and infrastructure. Both have their own listing on the New York Stock Exchange.
At the time of the split, both companies were roughly the same size, with revenues of about $56 billion. Six years later, HP Inc. (51,000 employees) for $63.5 billion in laptops, desktops and printers. HP Enterprise (60,000 employees) has averaged $29 billion in annual revenues since it sold its services business to CSC in 2017, primarily from servers and cloud services. By comparison, before the many layoffs over the past decade, the original HP employed 350,000 people.
HPE announced this month that it is building its first European supercomputer factory. With four of these factories, the company will focus more emphatically on what high performance computing (hpc): the processing of enormous amounts of data using interconnected groups of servers, which together provide a lot more computing power than conventional techniques.
Formula 1 and space travel
These supercomputers are used wherever large-scale calculations are performed, explains Walter Lioen, Research Service manager at SURF, the umbrella IT organization of Dutch educational and research institutions. Users of hpc are governments and companies. Lioen: “Governments include defense applications, cryptography of secret services and large-scale data analysis. Companies include chemicals, pharmaceuticals, the oil and gas industry, the automotive industry, Formula 1 and aerospace.”
The new HPE factory in the Czech Republic will soon produce two types of supercomputers: the Apollo server systems for, among other things, artificial intelligence (AI) and the Cray EX. Lioen: “Manufacturer Cray was acquired by HPE in 2019 and the EX is Cray’s top model supercomputer, specially built for the most demanding applications.”
The $1.3 billion acquisition of Cray was HPE’s largest to date. She must guide the company in terms of supercomputing-as-a-service give it more competitive power compared to major players such as Lenovo, Inspur and Atos. In the list of suppliers of the world’s 500 fastest supercomputers, HPE is second, with a market share of 16.8 percent, after the Chinese Lenovo (36 percent).
The choice for delivery of computing power and cloud infrastructure results in significant growth for HPE, but not a stable share price. The share fluctuated between 13 and more than 17 dollars last year. Like other tech companies, HPE is suffering from faltering supply, lockdowns in China and inflation.
“HPE is targeting an attractive market with hpc,” says analyst Jos Versteeg of investment bank InsingerGilissen. “The old HP was heavily reliant on printers and ink cartridges, and the company struggled for years to transition to the cloud.” But following tech giants such as Amazon, Google and Microsoft, HP has made that step final after the split from HPE, according to Versteeg. “There is a huge demand for computing power in companies. HP is a very big name historically, but hpc is what everyone is diving into right now.”
On Tuesday, HP Enterprise will announce its second-quarter results.
A version of this article also appeared in the newspaper of May 30, 2022