Hurd Says Channel Key To HP's $100 Billion Revenue Record

Hewlett-Packard cracked the $100 billion annual revenue barrier for the first time during its fiscal 2007, and HP CEO Mark Hurd said much of the credit for reaching that milestone goes to the channel.

"[Channel revenues] were huge," Hurd told CMP. "We don't have a channel rollup yet because of the timeframe. We get that a little bit delayed from the books because we break it down by channel, by segment. I predict for you that it will be very strong and very material and our channel partners grew at least as fast as the entire company did. My prediction will be that they probably grew a bit more. This is as much their victory as it is HP's. They've done a tremendous job over the period of time I've been here and certainly during this year and this quarter."

Solution providers returned the praise. "HP blades, storage and notebooks are really taking off," said Rick Chernick, CEO of Camera Corner Connecting Point, an HP solution provider in Green Bay, Wis. "HP technology is superior. No one can hold a candle to them."

Hurd singled out growth in notebooks, blade servers and software as star performers during the fourth quarter that saw revenue reach $28.3 billion, a 15 percent increase over the year earlier period. Those sales numbers helped boost the vendor's annual revenue to $104.3 billion.

Javier Uribe, co-president of Mobius Partners, an HP solution provider in San Antonio, Tex. said his HP business has grown about 20 percent this year, led by software and blade servers. "Our blade sales are up at least two-fold," he said. "Mark Hurd is getting a lot of people in the channel excited, a lot people within HP excited. That's big and it helped with the push [past $100 billion.]"

Earnings for its fiscal fourth quarter ended Oct. 31, reached $2.2 billion, or 81 cents a share, compared with earnings of $1.7 billion, or 60 cents a share in the same period last year.

Personal Systems Group revenue for the quarter grew 30 percent to $10.1 billion, driven by a year-over-year jump of 49 percent in notebooks. Enterprise Storage and Servers revenue totaled $5.2 billion, up 10 percent over fourth quarter 2006. Leading ESS growth was a 78 percent jump in x86 blade revenues.

Hurd noted during Monday's earnings call with reporters that software revenue for the period doubled to $698 led by growth from HP's Mercury Interactive acquisition earlier in the year.