Enterprise Services Empowering enterprises to realize their vision

Transcription

1 Enterprise Services Empowering enterprises to realize their vision Mike Nefkens Executive Vice President & General Manager Enterprise Services

2 Forward-looking statements This presentation may contain forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP and its consolidated subsidiaries may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forwardlooking statements, including but not limited to any projections of revenue, margins, expenses, HP's effective tax rate, earnings, net earnings per share, cash flows, benefit plan funding, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring charges; any statements of the plans, strategies and objectives of management for future operations, including the execution of restructuring plans and any resulting cost savings or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the need to address the many challenges facing HP's businesses; the competitive pressures faced by HP's businesses; risks associated with executing HP's strategy and plans for future operations; the impact of macroeconomic and geopolitical trends and events; the need to manage third party suppliers and the distribution of HP's products and services effectively; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; risks associated with HP's international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers, clients and partners; the hiring and retention of key employees; integration and other risks associated with business combination and investment transactions; the execution, timing and results of restructuring plans, including estimates and assumptions related to the cost and the anticipated benefits of implementing those plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HP s Quarterly Report on Form 10-Q for the quarter ended January 31, 2014 and HP s other filings with the Securities and Exchange Commission. HP assumes no obligation and does not intend to update these forward-looking statements. 2

3 FY 2013 accomplishments 400+ new clients largest deal won in industry market volume growth across Strategic Enterprise Services 24B Blocked attacks 6M Supported end-user devices 10K apps dev projects 18 Cloud locations across 5 continents 25% 25% Reduced incidents 22pts 22pts Increased leadership engagement 3

4 Strong FY13 performance across all metrics Our customers Our employees ES FY13 financials Client loyalty 86.9% 6.5 pts. Client innovation 82.3% 6.1 pts. Overall employee engagement index 5 pts. $24.1B Net revenue 7.4% over prior year vs. FY13 Mid-point Outlook Service quality metrics continue to get better with Year-over-Year improvement in the following areas: Executive engagement index 22 pts. 2.8% Operating Margin 1.2pts over prior year Priority 1 incidences 25% Total outage time 22% Mean time to repair 21% Overall attrition* Executive attrition* 0.5 pts. 2.5 pts. vs. FY13 Mid-point Outlook 4 * Voluntary attrition Customer and employee data compares FY13 exit to FY12 exit FY13 financials are restated

5 Long-term financial outlook remains unchanged Annual revenue growth 3% - 5% $ Operating margin rate 7% - 9% Return on invested capital 15% - 25% $ $ $ Revenue mix (core vs. cloud, security, big data, etc.) 75% / 25% 5

6 HP is a Leader in the Services market 8.0% 6.9% HP Enterprise Services is #2 market leader 6.0% 4.0% 2.0% 0.0% Q2 CY12 Q3 Q4 Q1 CY13 Q2 4.8% 2.8% 2.3% 2.0% Q3 Stabilized the business and created a strong base from which to build New Style of IT services market growing ~2x-3x growth rate of Traditional IT services market Services: Business Process Outsourcing, IT Outsourcing, Apps Management Source: Q313 IDC WW IT Services Tracker Represents 100% of the overall IT service market, and does not align HP s GBUs 6

7 Progress to date and FY14 priorities Fix & rebuild in-line with our expectations, but challenges remain Traditional services still representing majority of sales, while market growth is increasingly being driven by the New Style of IT FY14 priorities centered around 4 themes 1. 1 Build up Advisory and Transformation offerings 2. 2 Align sales engine to higher mix of project and New Style of IT services 3. 3 Improve service delivery for higher quality and lower cost 4. 4 Accelerate cultural transformation Overall progress entering FY14 in-line with prior expectations 7

8 Build up Advisory and Transformation offerings Seven practices aligned to clients agenda App Practice Industry Solutions Mobility & Workplace Solutions Analytics & Data Management App Services & Program Excellence Business Process Services Enterprise Security Workload & Cloud Solutions What we do Leverage specialized intellectual properties and platform expertise around specific industry segments Simplify and automate traditional enduser support and enable workforce productivity in a mobile world Deploy analytics to identify business opportunities and efficiently run your business, while streamlining data complexity Manage integrated app practice and leverage center of excellence for project capabilities & transformation roadmaps Partner with process experts and drive results with economic models based on continuous improvement Understand gaps in security operations and protect information as it moves in and out of the organization Define the optimal environment for critical app workload and enable network, storage and communication Seeing pipeline growth in all practice areas Strategic Enterprise Services doubled in FY13 on a year-over-year basis HP Enterprise Services is a market leader in 5 out of 7 practices 8

9 Align sales engine Shift to proactive selling and higher mix of project and New Style of IT services FY14 sales motion Renewals/RFP Reactive revenue Proactive new logo Proactive revenue Partners and channels Sales force deployment 4% 29% 96% FY13 FY14 9

10 Delivering innovation and client value Across seven interconnected practices Industry outcomes Client 1 HP Mobility & Workplace 2 Applications Analytics & Data Management One HP Business Process Services 6 Security Services 7 10 Workload & Cloud

11 Major Customer Wins - FY14 YTD AMS Our customers APJ EMEA USPS 11

12 Improve service delivery for higher quality and lower cost Driving productivity while maintaining service quality Labor cost Labor footprint TTM total cost of workforce as % of TTM revenue TTM Revenue ($B) 61.9% % % % % % % % 24.1 High-cost locations Medium/ low-cost locations 50% 50% 50% 50% 48% 52% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 FY12 FY13 FY14 Estimated IT outsourcing client uptime IT outsourcing change success 100.0% 99.9% 99.8% 99.95% 99.95% 99.88% 99.90% 99.94% 99.95% 99.94% 99.88% 100% 99% 99.4% 99.5% 99.5% 99.5% 99.5% 99.5% % of successful changes 99.4% 99.5% 99.7% 99.6% 98% >98% = Industry best practice* 99.5% 97% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Note: TTM = Trailing twelve months * Industry best practice is based on Gartner 12

13 Services brings the best of HP together Advise Services Transform Manage Printers & Personal Systems Converged Infrastructure HP Software Printers PCs Tablets Servers Storage Networking IT Management Analytics Security Cloud Security Big Data Mobility 13

14 Key takeaways FY13 performance in-line or better than expectations FY14 priorities focused on positioning organization for long-term growth and profit expansion Long-term financial outlook is achievable and value accretive to shareholders 14

15 Q & A