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HP Stays Hopeful on Storage

Storage was the major drag on Hewlett-Packard Co. (NYSE: HPQ) when it bottomed out last August and remained a laggard when it staged a bit of a recovery last quarter (see HP Storage Slammed and HP Reports Q1). Yet, HP executives say networked storage remains a major part of the companys overall strategy.

“One of the important factors in our overall mix is some of the recovery activity in our storage business,” Ann Livermore, executive VP of HP's Technology Solutions group, told analysts on the company’s earnings report call Wednesday night. “We are on a trajectory to build back revenue, and that’s important to us as we look to the second half in terms our storage strategy.”

Despite Livermore’s optimistic tone, HP’s earnings report from last quarter raised the question of whether the storage glass is half empty or half full. On the plus side:

  • The 1 percent year-over-year decline in storage revenue was a huge improvement from declines of 15 percent and 10 percent the previous two quarters.
  • Revenues from HP’s Enterprise Virtual Array (EVA) midrange systems were up more than 10 percent from the previous quarter.
  • Increases HP made in its storage sales force since August appear to be driving sales.
  • HP claims it won share in the NAS market last quarter.

On the other hand:

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