Shares of Hewlett Packard Enterprise Co. (HPE) are trading up about 54% on a year-to-date (YTD) basis as 2016 ends.

Since the enterprise IT firm split from its PC and printing arm, HP Inc. (HPQ), in November 2015, both firms have undergone massive restructurings in order to revamp their positioning in core markets. With Meg Whitman at the head of the Palo Alto, Calif.-based tech giant, HP Enterprise shed layers of its company including its software and enterprise services arm.

Whitman Spearheads Slim Down

Over the course of this year, investors and analysts alike have applauded HPE for its enhanced efficiency, flexibility and profit margins. In the firm’s most recent fiscal 2016 fourth-quarter earnings reported at the end of November, HPE reported mixed earnings, with top-line numbers falling short of analysts’ forecasts and earnings meeting the consensus. (See also: HPE Reports Mixed Fiscal Q4 Earnings.)

Despite weaker-than-expected guidance, analysts have expressed confidence in the fruits of Whitman’s massive trim down. First, HPE spun off and merged its enterprise IT services segment in a deal with Computer Sciences Corp. (CSC). In September, the firm’s software arm was bought out in a similar deal worth $8.8 billion by Micro Focus.

A Focus on Data Centers, HPC in 2017

Moving ahead in 2017, HPE will continue to focus on facilitating enterprises’ movement from on-premise data centers to the high-growth cloud. Recently, HPE has pushed its all-flash data center technology forward as an alternative to bulky on-site data centers and the more expensive public cloud.

In a $275 million deal set to close in fiscal 2017, HPE will acquire high-performance computer maker Silicon Graphics International in order to push into the emerging HPC market. After a 2% revenue decline adjusted for a strong U.S. dollar and spinoffs in the most recent quarter, HPE management foresees sales growth between 1% to 2% in the upcoming year. (See also: HPE Sees Growth in HPC Market.)

 

 

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