(HPQ) Hewlett-Packard Focuses on Analytics Business

After strengthening its position in the personal computing, server and cloud computing segments, HP Enterprise Management & Analytics, a division of Hewlett-Packard Company (HPQ), has recently rolled out a service specially targeted at its enterprise clients. The service is intended to manage and evaluate the Big Data generated by them.

This is a new line of business for HP, which will help it generate additional revenue, as it has the potential to improve efficiency, reduce risk and lower the cost structure of customers.

After a detailed research of the information and data analysis market, HP found that more than one out of two business executives of different companies were of the opinion that their organizations did not have the tools to glean business insights from the huge amounts of data they were generating. This prompted HP to develop technology that could help companies discover this information.

The study also found that companies have lacked the expertise and strategy to properly manage their database.

HP has understood the fact that with better management and analysis of data, companies can efficiently manage their customers. After identifying this spot, HP seeks to address the situation with new solutions.

As per a recent research report published by the technology research firm Gartner, the global analytics and business intelligence market is expected to grow 7.0% in 2013. Though this growth rate seems decent, it is low compared with the 16.0% growth estimated for 2011. While analyzing the growth rate, we have to keep in mind the recent recessionary phase, which the world economy is going through.

Gartner also expects the growth rate to remain in the single-digit range for the next few years. At the end of 2013, the analytics and business intelligence market will remain at $14 billion and grow to $17 billion by 2016.

Analytics is a market where HP has shifted its focus recently. However, other consulting and IT companies such as Accenture Plc. (ACN), International Business Machines (IBM),Dell Inc. (DELL) and Cognizant Tech (CTSH) have been in this market for quite some time.

The PC market is not doing so well at the moment, with declining revenues and increasing competition from small and medium companies and cannibalization by tablets pose some challenges. However, HP’s growing focus on new business segments, such as electronic medical records, cloud computing and now analytics will help the company to grow in the coming quarters.

Currently, H-P has a Zacks Rank #1 (Strong Buy).
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