HP Invests $1 Billion To Launch New Era Of Enterprise Services

PALO ALTO, Calif. HP today announced that it would invest $1 billion in the next generation of its Enterprise Services business. The transformation, to be built on HP's market-leading technology and software, will benefit clients through new offerings and improved service delivery. HP will invest in fully automated, standardized, state-of-the-art commercial data centers built on its Converged Infrastructure and operated by its industry-leading management software. Leveraging its experience from its own IT transformation, HP will enable clients to migrate their applications to these modernized infrastructure platforms, allowing them to run their businesses faster and more efficiently.

"Over the past 20 months, we focused on integrating EDS and improving profitability," said Tom Iannotti, senior vice president and general manager, HP Enterprise Services. "Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business. These next-generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers."

This initiative is designed to enhance the client experience and better position Enterprise Services for growth. HP will consolidate Enterprise Services' commercial data centers, management platforms, networks, tools and applications to create a more scalable, modernized and automated IT infrastructure that will better serve its clients' needs. As a result of productivity gains and automation, HP expects to eliminate roughly 9,000 positions over a multiyear period to reinvest for further growth and to increase shareholder value.

To fund this investment, HP will take a charge of approximately $1 billion over a multiyear period that will be included in its GAAP financial results. Once completed, this transformation is expected to generate annualized gross savings of approximately $1 billion and net savings after reinvestment in a range between $500 million and $700 million. HP will conduct an audio webcast for financial analysts and stockholders to discuss the Enterprise Services transformation today at 8:30 a.m. ET/5:30 a.m. PT. This meeting will be hosted by Ann Livermore, executive vice president, Enterprise Business, and Cathie Lesjak, executive vice president and chief financial officer. Access the live audio webcast here.