HP Jettisons 8 Percent of Workforce, Refocuses Priorities

By Michael Feldman

May 24, 2012

This week HP announced it will slash 27,000 workers from the payroll over the next couple of years as part of a company-wide restructuring. When complete, the effort is expected to generate between $3.0 to $3.5 billion of savings per year. The workforce reduction is the largest in the company’s 73-year history and reflects how far HP has drifted into unprofitable businesses.

“This is the beginning of a turnaround,” said HP CEO Meg Whitman, speaking about the restructuring strategy on CNBC. Despite the severe cutbacks announced this week, the recent quarterly earnings report was fairly upbeat. Compared to a year ago, sales and profits are down, but the company still managed to post a $1.6 billion profit in this last quarter, which was more than analysts had expected. Combined with the layoff announcement, Wall Street responded with approval, boosting HP’s stock by nearly 12 percent.

But the company has been slipping and sliding for the past few years as some of its businesses have foundered, while it spent billions buying up others (just since 2009: IBRIX, 3COM, Melodeo, Palm, Stratavia, 3PAR, Fortify Software, ArcSight, Autonomy, and Hiflex). Meanwhile, corporate leadership has been trying to figure out which areas of its diverse portfolio of hardware, software and services it needs to focus on.

According to Whitman, who joined the company last September, the big problem child has been the enterprise services group, a business HP inherited when it bought EDS in 2008. “Were in a transition from a lower growth, lower margin segment of that business to where we want to be in two or three or four years,” she said.

Whitman said the services group needs to be leaner and deliver higher value offerings. She conceded that such a strategy will shrink that business (currently around $26 billion per year) and contribute less to HP’s bottom line. The idea though is to make it profitable, which is not the case today.

According to the CEO, the company’s other four main business lines — personal systems, imaging/printing, software, and enterprise storage, servers and networking (ESSN) — should all be in growth mode. That wasn’t the case for the quarter just ended, where only the software business showed robust growth (22 percent year over year), with the ESSN business, in particular, taking a dive (down 5.5 percent). The was attributed, in part, to the recent world-wide shortage of hard drives. Longer term, though, HP looks to expand in all of these segments.

That doesn’t necessarily mean HP will be giving them equal attention. According to Whitman, the growth areas they will target include big data and analytics, cloud computing, security, and application modernization. She said that will involve investments in R&D as well as productivity tools for HP’s workforce. Whitman declined to specify exactly how much of that $3.0 to $3.5 billion of annualized savings would be plowed back into the company versus just adding to the bottom line, saying only that the “majority” of the money would be invested. HP’s R&D budget is around $3.2 billion per year, a value some analysts have pointed out is too small to compete with other large enterprise IT players like IBM.

Some of this additional investment could end up in HP’s high performance computing (HPC)business, but don’t count on it. Whitman said they are not intending to spread the money around the company in “peanut butter” fashion, with a little dollop for everyone. Instead, their intention is to invest strategically in certain growth areas, especially big data and cloud. “We’re going to make a small number of very big bets,” she explained.

HP doesn’t break out its HPC revenue from its ESSN sales, which totaled over $22 billion in 2011. But if you can believe IDC’s HPC server revenue numbers, which had HP at $3.3 billion last year, it represents a sizeable chunk of the company’s enterprise business. HP and IBM share about two-thirds of the HPC server market, more or less evenly, so any investment (or defunding) in HPC could disturb that dynamic. At some point soon, Whitman and company will have to ask themselves if they think HPC is one of those growth areas worth investing in.

The larger question for HP, though, is existential. What kind of company does it want to be? Right now HP develops and sells everything from printer ink cartridges to supercomputers. (Amazingly, it does both of those rather well.) And as of today, HP’s roadmap includes a new tablet computer and an exascale machine. No other company on the planet can make that claim.

But in an era where technology enables smaller and more nimble companies to compete at the same level as their largest competitors, it’s hard to imagine that a be-everything-to-everyone approach is a sustainable strategy. Like, its competitors IBM and Apple have already done, HP needs to decide if it wants to be an enterprise IT company or a consumer IT company. This week’s rejiggering of the organization may refocus some of HP’s priorities, but that larger decision awaits.

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

CMU’s Latest “Card Shark” – Libratus – is Beating the Poker Pros (Again)

January 20, 2017

It’s starting to look like Carnegie Mellon University has a gambling problem – can’t stay away from the poker table. Read more…

By John Russell

IDG to Be Bought by Chinese Investors; IDC to Spin Out HPC Group

January 19, 2017

US-based publishing and investment firm International Data Group, Inc. (IDG) will be acquired by a pair of Chinese investors, China Oceanwide Holdings Group Co., Ltd. Read more…

By Tiffany Trader

Weekly Twitter Roundup (Jan. 19, 2017)

January 19, 2017

Here at HPCwire, we aim to keep the HPC community apprised of the most relevant and interesting news items that get tweeted throughout the week. Read more…

By Thomas Ayres

France’s CEA and Japan’s RIKEN to Partner on ARM and Exascale

January 19, 2017

France’s CEA and Japan’s RIKEN institute announced a multi-faceted five-year collaboration to advance HPC generally and prepare for exascale computing. Among the particulars are efforts to: build out the ARM ecosystem; work on code development and code sharing on the existing and future platforms; share expertise in specific application areas (material and seismic sciences for example); improve techniques for using numerical simulation with big data; and expand HPC workforce training. It seems to be a very full agenda. Read more…

By Nishi Katsuya and John Russell

HPE Extreme Performance Solutions

Remote Visualization: An Integral Technology for Upstream Oil & Gas

As the exploration and production (E&P) of natural resources evolves into an even more complex and vital task, visualization technology has become integral for the upstream oil and gas industry. Read more…

ARM Waving: Attention, Deployments, and Development

January 18, 2017

It’s been a heady two weeks for the ARM HPC advocacy camp. At this week’s Mont-Blanc Project meeting held at the Barcelona Supercomputer Center, Cray announced plans to build an ARM-based supercomputer in the U.K. while Mont-Blanc selected Cavium’s ThunderX2 ARM chip for its third phase of development. Last week, France’s CEA and Japan’s Riken announced a deep collaboration aimed largely at fostering the ARM ecosystem. This activity follows a busy 2016 when SoftBank acquired ARM, OpenHPC announced ARM support, ARM released its SVE spec, Fujistu chose ARM for the post K machine, and ARM acquired HPC tool provider Allinea in December. Read more…

By John Russell

Women Coders from Russia, Italy, and Poland Top Study

January 17, 2017

According to a study posted on HackerRank today the best women coders as judged by performance on HackerRank challenges come from Russia, Italy, and Poland. Read more…

By John Russell

Spurred by Global Ambitions, Inspur in Joint HPC Deal with DDN

January 17, 2017

Inspur, the fast-growth cloud computing and server vendor from China that has several systems on the current Top500 list, and DDN, a leader in high-end storage, have announced a joint sales and marketing agreement to produce solutions based on DDN storage platforms integrated with servers, networking, software and services from Inspur. Read more…

By Doug Black

Weekly Twitter Roundup (Jan. 12, 2017)

January 12, 2017

Here at HPCwire, we aim to keep the HPC community apprised of the most relevant and interesting news items that get tweeted throughout the week. Read more…

By Thomas Ayres

IDG to Be Bought by Chinese Investors; IDC to Spin Out HPC Group

January 19, 2017

US-based publishing and investment firm International Data Group, Inc. (IDG) will be acquired by a pair of Chinese investors, China Oceanwide Holdings Group Co., Ltd. Read more…

By Tiffany Trader

France’s CEA and Japan’s RIKEN to Partner on ARM and Exascale

January 19, 2017

France’s CEA and Japan’s RIKEN institute announced a multi-faceted five-year collaboration to advance HPC generally and prepare for exascale computing. Among the particulars are efforts to: build out the ARM ecosystem; work on code development and code sharing on the existing and future platforms; share expertise in specific application areas (material and seismic sciences for example); improve techniques for using numerical simulation with big data; and expand HPC workforce training. It seems to be a very full agenda. Read more…

By Nishi Katsuya and John Russell

ARM Waving: Attention, Deployments, and Development

January 18, 2017

It’s been a heady two weeks for the ARM HPC advocacy camp. At this week’s Mont-Blanc Project meeting held at the Barcelona Supercomputer Center, Cray announced plans to build an ARM-based supercomputer in the U.K. while Mont-Blanc selected Cavium’s ThunderX2 ARM chip for its third phase of development. Last week, France’s CEA and Japan’s Riken announced a deep collaboration aimed largely at fostering the ARM ecosystem. This activity follows a busy 2016 when SoftBank acquired ARM, OpenHPC announced ARM support, ARM released its SVE spec, Fujistu chose ARM for the post K machine, and ARM acquired HPC tool provider Allinea in December. Read more…

By John Russell

Spurred by Global Ambitions, Inspur in Joint HPC Deal with DDN

January 17, 2017

Inspur, the fast-growth cloud computing and server vendor from China that has several systems on the current Top500 list, and DDN, a leader in high-end storage, have announced a joint sales and marketing agreement to produce solutions based on DDN storage platforms integrated with servers, networking, software and services from Inspur. Read more…

By Doug Black

For IBM/OpenPOWER: Success in 2017 = (Volume) Sales

January 11, 2017

To a large degree IBM and the OpenPOWER Foundation have done what they said they would – assembling a substantial and growing ecosystem and bringing Power-based products to market, all in about three years. Read more…

By John Russell

UberCloud Cites Progress in HPC Cloud Computing

January 10, 2017

200 HPC cloud experiments, 80 case studies, and a ton of hands-on experience gained, that’s the harvest of four years of UberCloud HPC Experiments. Read more…

By Wolfgang Gentzsch and Burak Yenier

A Conversation with Women in HPC Director Toni Collis

January 6, 2017

In this SC16 video interview, HPCwire Managing Editor Tiffany Trader sits down with Toni Collis, the director and founder of the Women in HPC (WHPC) network, to discuss the strides made since the organization’s debut in 2014. Read more…

By Tiffany Trader

BioTeam’s Berman Charts 2017 HPC Trends in Life Sciences

January 4, 2017

Twenty years ago high performance computing was nearly absent from life sciences. Today it’s used throughout life sciences and biomedical research. Genomics and the data deluge from modern lab instruments are the main drivers, but so is the longer-term desire to perform predictive simulation in support of Precision Medicine (PM). There’s even a specialized life sciences supercomputer, ‘Anton’ from D.E. Shaw Research, and the Pittsburgh Supercomputing Center is standing up its second Anton 2 and actively soliciting project proposals. There’s a lot going on. Read more…

By John Russell

AWS Beats Azure to K80 General Availability

September 30, 2016

Amazon Web Services has seeded its cloud with Nvidia Tesla K80 GPUs to meet the growing demand for accelerated computing across an increasingly-diverse range of workloads. The P2 instance family is a welcome addition for compute- and data-focused users who were growing frustrated with the performance limitations of Amazon's G2 instances, which are backed by three-year-old Nvidia GRID K520 graphics cards. Read more…

By Tiffany Trader

US, China Vie for Supercomputing Supremacy

November 14, 2016

The 48th edition of the TOP500 list is fresh off the presses and while there is no new number one system, as previously teased by China, there are a number of notable entrants from the US and around the world and significant trends to report on. Read more…

By Tiffany Trader

For IBM/OpenPOWER: Success in 2017 = (Volume) Sales

January 11, 2017

To a large degree IBM and the OpenPOWER Foundation have done what they said they would – assembling a substantial and growing ecosystem and bringing Power-based products to market, all in about three years. Read more…

By John Russell

Vectors: How the Old Became New Again in Supercomputing

September 26, 2016

Vector instructions, once a powerful performance innovation of supercomputing in the 1970s and 1980s became an obsolete technology in the 1990s. But like the mythical phoenix bird, vector instructions have arisen from the ashes. Here is the history of a technology that went from new to old then back to new. Read more…

By Lynd Stringer

Container App ‘Singularity’ Eases Scientific Computing

October 20, 2016

HPC container platform Singularity is just six months out from its 1.0 release but already is making inroads across the HPC research landscape. It's in use at Lawrence Berkeley National Laboratory (LBNL), where Singularity founder Gregory Kurtzer has worked in the High Performance Computing Services (HPCS) group for 16 years. Read more…

By Tiffany Trader

Dell EMC Engineers Strategy to Democratize HPC

September 29, 2016

The freshly minted Dell EMC division of Dell Technologies is on a mission to take HPC mainstream with a strategy that hinges on engineered solutions, beginning with a focus on three industry verticals: manufacturing, research and life sciences. "Unlike traditional HPC where everybody bought parts, assembled parts and ran the workloads and did iterative engineering, we want folks to focus on time to innovation and let us worry about the infrastructure," said Jim Ganthier, senior vice president, validated solutions organization at Dell EMC Converged Platforms Solution Division. Read more…

By Tiffany Trader

Enlisting Deep Learning in the War on Cancer

December 7, 2016

Sometime in Q2 2017 the first ‘results’ of the Joint Design of Advanced Computing Solutions for Cancer (JDACS4C) will become publicly available according to Rick Stevens. He leads one of three JDACS4C pilot projects pressing deep learning (DL) into service in the War on Cancer. Read more…

By John Russell

Lighting up Aurora: Behind the Scenes at the Creation of the DOE’s Upcoming 200 Petaflops Supercomputer

December 1, 2016

In April 2015, U.S. Department of Energy Undersecretary Franklin Orr announced that Intel would be the prime contractor for Aurora: Read more…

By Jan Rowell

Leading Solution Providers

D-Wave SC16 Update: What’s Bo Ewald Saying These Days

November 18, 2016

Tucked in a back section of the SC16 exhibit hall, quantum computing pioneer D-Wave has been talking up its new 2000-qubit processor announced in September. Forget for a moment the criticism sometimes aimed at D-Wave. This small Canadian company has sold several machines including, for example, ones to Lockheed and NASA, and has worked with Google on mapping machine learning problems to quantum computing. In July Los Alamos National Laboratory took possession of a 1000-quibit D-Wave 2X system that LANL ordered a year ago around the time of SC15. Read more…

By John Russell

CPU Benchmarking: Haswell Versus POWER8

June 2, 2015

With OpenPOWER activity ramping up and IBM’s prominent role in the upcoming DOE machines Summit and Sierra, it’s a good time to look at how the IBM POWER CPU stacks up against the x86 Xeon Haswell CPU from Intel. Read more…

By Tiffany Trader

Nvidia Sees Bright Future for AI Supercomputing

November 23, 2016

Graphics chipmaker Nvidia made a strong showing at SC16 in Salt Lake City last week. Read more…

By Tiffany Trader

Beyond von Neumann, Neuromorphic Computing Steadily Advances

March 21, 2016

Neuromorphic computing – brain inspired computing – has long been a tantalizing goal. The human brain does with around 20 watts what supercomputers do with megawatts. And power consumption isn’t the only difference. Fundamentally, brains ‘think differently’ than the von Neumann architecture-based computers. While neuromorphic computing progress has been intriguing, it has still not proven very practical. Read more…

By John Russell

The Exascale Computing Project Awards $39.8M to 22 Projects

September 7, 2016

The Department of Energy’s Exascale Computing Project (ECP) hit an important milestone today with the announcement of its first round of funding, moving the nation closer to its goal of reaching capable exascale computing by 2023. Read more…

By Tiffany Trader

BioTeam’s Berman Charts 2017 HPC Trends in Life Sciences

January 4, 2017

Twenty years ago high performance computing was nearly absent from life sciences. Today it’s used throughout life sciences and biomedical research. Genomics and the data deluge from modern lab instruments are the main drivers, but so is the longer-term desire to perform predictive simulation in support of Precision Medicine (PM). There’s even a specialized life sciences supercomputer, ‘Anton’ from D.E. Shaw Research, and the Pittsburgh Supercomputing Center is standing up its second Anton 2 and actively soliciting project proposals. There’s a lot going on. Read more…

By John Russell

Dell Knights Landing Machine Sets New STAC Records

November 2, 2016

The Securities Technology Analysis Center, commonly known as STAC, has released a new report characterizing the performance of the Knight Landing-based Dell PowerEdge C6320p server on the STAC-A2 benchmarking suite, widely used by the financial services industry to test and evaluate computing platforms. The Dell machine has set new records for both the baseline Greeks benchmark and the large Greeks benchmark. Read more…

By Tiffany Trader

What Knights Landing Is Not

June 18, 2016

As we get ready to launch the newest member of the Intel Xeon Phi family, code named Knights Landing, it is natural that there be some questions and potentially some confusion. Read more…

By James Reinders, Intel

  • arrow
  • Click Here for More Headlines
  • arrow
Share This