UPDATED 07:25 EDT / MAY 31 2011

3PAR Proving its Worth at HP in Entertainment Sector

Hewlett-Packard has been making serious pushes to expand its storage business. Both former CEO Mark Hurd and current chief executive Leo Apotheker put an emphasis on staying competitive in this market via two main approaches: R&D and acquisitions.

When looking at HP’s research and development spenditure, it has spent an average of 3 percent of its revenues in this area. The Motley Fool compared this figure to that of Hewlett-Packard’s main competitors:

“HP’s R&D expense is much higher than Dell’s but still severely lags IBM. In years past, that wasn’t seen as a critique, as Mark Hurd increasingly improved profits. However, after his scandal-tinged departure, HP has been forced to re-evaluate itself.”

This strategy will require heavy investments into research. In addition to growing competition, another reason behind this is that the amount of storage-related acquisitions HP has made, notably that of 3PAR, has had an impact on HP’s cash flow.  The company’s change of course may just be what it takes to increase profit from this ever-growing industry – a goal it seems to be pushing very actively.

The company announced not too long ago that NY securities firm  Samuel A. Ramirez & Co., has chosen to deploy  HP 3PAR Utility Storage as a replacement for its legacy SAN. Reportedly, that resulted in a x24 increase in network performance, and comes Knight Frank LLP, another major customer than signed up with the company lately.

As HP is making strides in monetizing its 3PAR investment, demand for its products may also increase from the direction of another industry – entertainment and media.  A report by IT  consultancy firm Coughlin Associates forecasts that as image resolutions increase, storage shipped to the entertainment industry will go up from $3.8 billion this year to $6.4 billion in 2016.


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