Rich Baldwin, CIO and chief strategy officer at Nth Generation Computing, a San Diego-based HP enterprise partner, said that Nth and HP have been grabbing server sales from IBM even before Lenovo officially announced it would buy IBM's x86 server business.
Nth has not seen a spike in new IBM server takeouts since the announcement, mainly because it is more likely to run into Dell or Cisco as a competitor in its area, Baldwin said. "IBM is the easiest to beat for server sales," he said. "Cisco is the hardest. But our HP server business overall is up just like HP's is."
Nth's storage business also is growing quickly compared to HP's flat year-over-year growth, said Baldwin. He said that HP's flat growth in storage is most likely due to a huge shift in sales from HP's legacy EVA line to its 3PAR storage line.
"EVA had a very large installed base," he said. "Some customers are still happy. EVA still works, so we're seeing some add-on business. But we're seeing a large part of the business moving to 3PAR, mainly the 7000 series, which is at the lower end of that line. When HP first bought 3PAR, prices were significantly higher. Now the business is taking off with its lower-end products, which cost maybe one-fourth or one-third the price," Baldwin said.
The robust HP industry-standard server sales come with the company showing signs that its turnaround is on track, posting better-than-expected results for its first fiscal quarter ended Jan. 31.
HP reported GAAP diluted net earnings per share of 90 cents, well above the Wall Street consensus of 84 cents per share and up 10 percent from the year-ago quarter.
Bolstered by increases in industry-standard server and personal system sales, HP reported sales for the quarter of $28.2 billion, above the Wall Street consensus of $27.19 billion, but down 1 percent from the prior-year period.
HP's Enterprise Group sales in the quarter, which includes servers, storage and networking, was overall up 1 percent to $6.99 billion compared to $6.94 billion in the year-ago quarter.
Whitman, for her part, sees the Enterprise Group business turnaround taking hold. "You can see it in the ISS [industry standard server] revenues as well as networking and storage," she said.
HP's networking sales were up overall 4 percent in the quarter, as the company competed especially well with Cisco in the switching business with HP network switch business up 5 percent in the quarter, said Whitman.
"We are on it," she said of the Enterprise Group offensive. "We have got the right people on it. I think you'll see margin improvement over the course of the year if the market holds up and we can continue to execute."
With a rapid shift toward disruptive new-style information technology solutions, Whitman said HP may start to look at small to midsize acquisitions to gain a competitive advantage.
"As this market changes very dramatically, you can see that we may need acquisitions in security, big data mobility and cloud," said Whitman. "We will be very judicious. It will be returns-based."
Joseph F. Kovar contributed to this story.