IT vendor round-up: NEC Australia, HP, Apple

NEC Australia has revealed plans to continue to invest in cultivating its IT services business in 2015 and has revealed it is on track to exceeding expectations for its current financial year.

The company executed the first phase of an internal business transformation in 2014, involving merging core operations and services across what used to be two separate organisations.

In the year ahead, NEC Australia plans to continue its transformation and is planning investments including the establishment of a large ICT operations facility at a NSW university. The company also plans to invest in other new operational facilities and in new technologies.

NEC Australia Managing Director Tetsuro Akagi said the first phase of the revamp correlated to 2014 being one of the strongest years in the company’s 45-year history in the market. The company won major new contracts with organisations including the Department of Defence, the Northern Territory Government and South Australia Police.

The company expects to build on this growth in FY15 and exceed growth expectations. The announcement coincides with news that NEC Australia and partner Cisco have won a deal to provide the core ICT infrastructure for Victoria’s redevelopment of the Box Hill Hospital.

As part of the revamp, the hospital plans to set up a central business service centre and transition to a more modern messaging system. NEC Australia has been contracted to lead the design, procurement and implementation of the facility’s ICT network, telephone system and data centre. NEC will implement a Cisco unified communications system to fulfil the contract.

HP earnings decline 4% in January quarter

HP has reported a 4% slump in profit for its fiscal first quarter to US$1.37 billion ($1.74 billion) as revenue stayed flat or declined across each of the company’s operating segments.

Total net revenue fell 5% to US$26.8 billion, while earning per share dipped 1% to US$0.73. PC revenue remained flat year-on-year, with commercial revenue down 1% but consumer revenue increasing by 2%.

Enterprise group revenue also remained flat, but enterprise services revenue declined by 11% year-on-year. Printing revenue likewise fell 5%, software revenue fell 5% and HP Financial Services revenue was down 8%.

The appreciation of the US dollar weighed on HP’s results for the quarter and has prompted HP to lower its per-share earnings estimate for its full financial year by 30 cents per share to a range of US$3.53 to US$3.73.

“While we were able to manage the impact of currency in the quarter and deliver earnings as expected, we believe the impact on FY15 will be significantly greater than we anticipated in November,” CEO Meg Whitman commented.

“We’ll work hard to offset these impacts through re-pricing and productivity, but fully mitigating currency movements of this size would require reducing investments and mortgaging our future. We won’t do that.”

Despite the bumpy first quarter, Whitman said the HP turnaround remains on track. “We grew operating profit margins across all of our major business segments [during the quarter], increased investment in innovation, and executed well across key areas of our portfolio and in our separation activities. Our progress continues as we head into Q2.”

Apple to spend $2.45bn on two DCs in Europe

Apple has committed €1.7 billion ($2.45 billion) to build two new data centres in Europe, as regulators in the region consider tightening controls over data privacy and sovereignty.

The company will build two 166,000 m² data centres - one in Ireland and the other in Denmark. The facilities, which will both be 100% powered by renewable energy, are expected to come online in 2017.

The data centres will power Apple’s online services across Europe, including its online stores iTunes and the App Store, its iMessage mobile messaging service, Apple Maps and its Siri virtual personal assistant service.

In a statement announcing the plans, Apple said it now directly employs 18,300 people in 19 European countries. The company also claims to support nearly 672,000 jobs across the region, including 530,000 related to the development of iOS apps.

Apple’s plan to open the new facilities comes amid increased concern over data privacy among European citizens and regulators.

Companies seeking to transfer personal data overseas must already meet strict guidelines, and proposed new rules would allow companies that violate the EU’s data protection rules to be fined up to €100 million or 5% of their annual revenue. Operating Apple services in Europe from local data centres could help Apple comply with any new data privacy regulations.