Sales of HP's Business Critical Itanium-Based Servers Hit Five-Years Low

From X-bit Labs: Despite of favourable court ruling that ordered Oracle to support systems powered by Intel Itanium microprocessors with latest software, sales of Hewlett-Packard's business critical systems (BCS) not only again declined in Q3 of fiscal 2012, but even hit five-years low.

"Business critical systems revenue declined 16% year-over-year. Within BCS, NonStop server revenue grew double-digits, but BCS performance continued to be impacted by Itanium revenue decline, even with the first ruling in the Oracle Itanium case going in our favor," said Catherine Lesjak, chief financial officer of HP, during a conference call with financial analysts.

HP's enterprise servers, storage and networking (ESSN) division earned last quarter $5.1 billion in revenue, which is 4% lower compared to the same quarter a year ago because of declines in demand for storage solutions and business critical systems. Operating profit of the whole division was $562 million.

Revenue that HP received for its business critical machines totaled $357 million which is a five-years low. The continuing decline of demand for HP's mission critical servers is a direct result of Oracle's decision to stop releasing new software for Intel Itanium-based systems in March, 2011. Since the Q1 FY2011, HP's BCS revenue contracted by around 33%, or by nearly $200 million.

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