Hewlett-Packard Company (HPQ) claimed that its Application Performance Management (APM) software has helped different companies to enhance their business performance. The responses of customers have also shot up for these companies as a result. Vodafone and HP channel partner J9 Technologies are the latest customers to use the software to assess their IT infrastructure performance.
Given its ability to monitor aspects of existing infrastructure systems to improve their efficiency and operation, HP's APM solution should see steady adoption. Especially considering the fact that most companies are moving to a cloud-based model where efficiency of IT operations is of paramount importance.
Although public and private enterprises have reduced their IT spending budgets, which could have affected repeat orders from existing and new customers, HP is seeing a steady flow of new business as the company is adopting innovative strategies that bring value to customers in the current environment while at the same time playing to its own strengths.
However, HP continues to see many challenges, stemming mainly from macroeconomic concerns and secular changes in the printing market. While Lexmark's (LXK) exit from the printing business could improve chances of share gains, this is not likely to be meaningful in the long term, as the inkjet market continues to shrink due to the easy availability of mobile media devices such as tablets and smartphones, which are reducing the need for taking printouts.
Margins in the services business are also likely to remain weak this year.
HP is implementing various strategies to generate growth. Recently, the company took some major restructuring actions to manage costs, drive growth and improve the health of its balance sheet.
Currently, the company holds a Zacks #3 Rank (Hold).