Generative AI boosts HPE Q2 earnings | Computer Weekly

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Hewlett Packard Enterprise (HPE) reported income of $7.0 billion within the second quarter, up 4% from the identical quarter final 12 months. Though demand for computing tools was decrease throughout the quarter, the corporate skilled vital progress in enterprise areas that straight assist clients in synthetic intelligence (AI) improvement.

Its high-performance computing and synthetic intelligence enterprise reported income of $840 million, up 18% from final 12 months. Nonetheless, its computing enterprise posted income of $2.8 billion, down 8% from the year-ago interval. Storage income was $1.0 billion, down 3% from the identical quarter final 12 months. HPE’s intelligence enterprise reported income of $1.3 billion, up 50% from the year-ago interval.

Antonio Neri, president and CEO of Hewlett Packard Enterprise, stated: “Our transition to a extremely worthwhile portfolio, led by the Clever Edge section, and powerful demand for our AI providing additional strengthen the funding alternative for our shareholders.”

In an earnings name transcript posted on Searching for Alpha, Neri talked about how the corporate’s hybrid cloud providing, HPE Greenlake, is experiencing progress in high-margin providers.

“Our HPE GreenLake platform continues to develop our software program infrastructure and providers, bringing in additional than $10 billion in whole contracts for the primary time this quarter,” he stated.

“HPE GreenLake additionally managed our ARR [annual renewal rate] to $1.1 billion within the second quarter, with a rising share coming from high-margin software program and providers, which now accounts for 66% of whole ARR.”

However general, the corporate has benefited from the business buzz round generative AI, CFO Tarek Robiatti stated: “The emergence of enormous language fashions and generative AI has pushed a number of inquiries from our buyer base over the past quarter which are turning into improvement and orders.

“Over the previous few months, we have had a number of massive enterprise AI wins totaling greater than $800 million and counting. This consists of massive AI-as-a-service offers underneath the GreenLake mannequin.

“We imagine that constructing and working large-scale AI fashions requires distinctive computing capabilities, together with silicon and software program, which our wonderful supercomputers and HPC and AI options are extraordinarily nicely geared up to do. We count on AI demand to drive wholesome income progress going ahead and intend to take a position each organically and inorganically to completely capitalize on this chance.”

Among the many large wins for the quarter is a brand new supercomputer for BASF that makes use of AMD CPUs and makes use of a brand new strategy to cooling.

The corporate additionally not too long ago signed a memorandum of understanding (MoU) with Crown Business Service (CCS) centered on GreenLake to allow public sector organizations to run their workloads and purposes within the cloud.

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