HP's Turnaround: Turning to New Products

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Dec. 10 (Bloomberg) -- Hewlett-Packard Executive Vice President Bill Veghte discusses the company's new products with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

On hp's turnaround.

He joins me from barcelona where hp is hosting its annual conference.

It is great to have you back here on the show.

Basically what you have unveiled is a set of new products, hardware, and software to increase the workload of servers.

You call it a converged secret.

How big do you think this can become?

Absolutely.

What customers are looking for is they no longer want silos of servers and networking.

They are looking for a single pull of physical resources.

What we announced today was a breakthrough set of innovations that enables customers to more easily and efficiently access that infrastructure whether it to be compute, storage, or network bandwidth.

How big do you think this can become in terms of the percentage of hp's business?

You know, the feedback we have had from customers and partners here in barcelona has been overwhelming and what our partners are telling us is, look.

They do much of this integration themselves and what they are looking for us to do is deliver that integration out-of-the-box for customers.

We think this could be anywhere up to 25% to 35% of the business and growing.

Ok.

we know you are excited about the moonshot server business especially for large businesses.

What about those of smaller, less-cutting-edge businesses?

The reality, emily, is that customers are looking for a new class form nuts and delivers much lower costs that should -- delivers much lower density and costs.

They might rely on an hp partner or service provider that has deployed that moonshot server in their cloud and delivering small business and better economics and efficiency.

If converged infrastructure becomes 25% to 35% of the business, what becomes the smaller part of the business?

The reality is that the infrastructure business matures.

Customers are looking for scale area that they are looking for speed and efficiency.

A very logically, really, for the last 10 or 15 years they have had these isolated, brittle silos.

They will consume more compute and more storage.

They will consume more bandwidth.

This is a more efficient way to consume it.

The last quarter, hp's enterprise group is up 2%. that is great because the quarter before that sales fell 9%. since you have taken over, what have your biggest initiatives the end?

You know, last quarter, the first time in eight quarters we grew the business.

When you decompose it, the thing that is exciting is where you saw the growth.

You saw it in converged storage where we are up 47%, delivering a better value proposition.

We saw growth in servers.

Growth and networking.

The reality is that when i think about what we are doing in the enterprise group, we are delivering tremendous innovation that is delivering better value per customer.

It is as simple as that.

We are here in barcelona hp discover.

Frankly, we are having an innovation party over here.

Some of the biggest companies like amazon, facebook, google, they are buying service from non-brand-name companies.

How do you defend against that trend?

The reality, emily, is that many customers are going to want to do the infrastructure, but they need a partner like hp to deliver that the value.

While facebook or google might be able to afford the engineering, the talent to be able to deliver that, the majority of customers need a value -- need a partner like hp to deliver that value.

Q4 revenue is up 4% but hp does a lot to networking business in china.

How exposed are you to slow down in spending from the state-run enterprises in china and other chinese-run companies?

When you decompose that's number in q4, the network business is up 3.3%. it is reasonably well-balanced across the different geography.

China has historically been a strong market for us.

We saw a growth in asia broadly and good growth in europe as well.

So, you are meg whitman's right hand person.

She seems to be realistic about what we can expect.

She said on the last earnings call, it will be a tough year but a pivotal year.

When do you think we will hear more positive statements?

You know, emily, we are working very hard.

We are pleased, as she highlighted, with the progress and turnaround.

I wish you could yield the buzz with customers here at discover.

The feedback has been tremendous with the innovations we announced today.

As you know well, companies come back on the backs of great

This text has been automatically generated. It may not be 100% accurate.

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