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Hewlett Packard Enterprise (HPE) Teams Up with Dropbox
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Hewlett Packard Enterprise Company (HPE - Free Report) is leaving no stone unturned to expand its business via strategic partnerships. The company’s recent partnership with Dropbox Inc. should contribute to the company’s overall growth.
Hewlett Packard Enterprise’s latest collaboration with Dropbox comes at an opportune time as Dropbox has decided to dump Amazon.com Inc.’s (AMZN - Free Report) Amazon Web Services (AWS). According to reports, Hewlett Packard Enterprise improved some of its computers to provide hardware infrastructure to help Dropbox build its own data centers and store customer data in its own amenities.
Initially, it looked like Dropbox and AWS could not dissociate from each other. Dropbox is a file backup service that offers cloud-based file management, storage systems and client software. These files were stored on Amazon’s facilities rather than machines owned by Dropbox. But given the size and nature of its operations, management felt it could more efficiently run operations using a hybrid model. Since this isn’t something Amazon provides, it decided to go with HPE, one of the companies offering the facility.
The partnership will help both Hewlett Packard Enterprise and Dropbox to leverage each other’s resources. Dropbox, in addition, will be able to expand beyond casual consumers and small enterprises as HPE will also try to sell Dropbox services to its enterprise customers.
A lot of corporate workflow is headed toward the cloud, and therefore the Dropbox integration will enhance user experience, expanding Hewlett Packard Enterprise’s services across all devices. The integration will make it easier for Office users to edit and share files across different devices and software.
None of the companies revealed the financial details of the partnership. However, according to The Wall Street Journal, “Dropbox "drove a hard bargain" to lower the cost.”
Last Words
Keeping in mind the ever evolving needs of customers wanting to transact business on-the-go, the alliance appears to be a sensible move by Hewlett Packard Enterprise. Also, a number of businesses use Dropbox as their de facto document storage service. Adding to the positives, the company recently took a step toward restructuring its struggling IT services business as it announced the spin-off of the Enterprise Services segment, following which the segment will merge with Computer Sciences Corporation . The transaction is expected to allow Hewlett Packard Enterprise to focus on faster-growing businesses and unlock value for shareholders.
Furthermore, Hewlett Packard Enterprise’s strategic divestments and initiatives to return value to shareholders in the form of dividend and share repurchases are positives.
However, macroeconomic challenges and tepid IT spending remain near-term concerns. Competition from International Business Machines (IBM - Free Report) and Oracle further add to its woes.
Currently, Hewlett Packard Enterprise carries a Zacks Rank #3 (Hold).
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Hewlett Packard Enterprise (HPE) Teams Up with Dropbox
Hewlett Packard Enterprise Company (HPE - Free Report) is leaving no stone unturned to expand its business via strategic partnerships. The company’s recent partnership with Dropbox Inc. should contribute to the company’s overall growth.
Hewlett Packard Enterprise’s latest collaboration with Dropbox comes at an opportune time as Dropbox has decided to dump Amazon.com Inc.’s (AMZN - Free Report) Amazon Web Services (AWS). According to reports, Hewlett Packard Enterprise improved some of its computers to provide hardware infrastructure to help Dropbox build its own data centers and store customer data in its own amenities.
Initially, it looked like Dropbox and AWS could not dissociate from each other. Dropbox is a file backup service that offers cloud-based file management, storage systems and client software. These files were stored on Amazon’s facilities rather than machines owned by Dropbox. But given the size and nature of its operations, management felt it could more efficiently run operations using a hybrid model. Since this isn’t something Amazon provides, it decided to go with HPE, one of the companies offering the facility.
The partnership will help both Hewlett Packard Enterprise and Dropbox to leverage each other’s resources. Dropbox, in addition, will be able to expand beyond casual consumers and small enterprises as HPE will also try to sell Dropbox services to its enterprise customers.
A lot of corporate workflow is headed toward the cloud, and therefore the Dropbox integration will enhance user experience, expanding Hewlett Packard Enterprise’s services across all devices. The integration will make it easier for Office users to edit and share files across different devices and software.
None of the companies revealed the financial details of the partnership. However, according to The Wall Street Journal, “Dropbox "drove a hard bargain" to lower the cost.”
Last Words
Keeping in mind the ever evolving needs of customers wanting to transact business on-the-go, the alliance appears to be a sensible move by Hewlett Packard Enterprise. Also, a number of businesses use Dropbox as their de facto document storage service. Adding to the positives, the company recently took a step toward restructuring its struggling IT services business as it announced the spin-off of the Enterprise Services segment, following which the segment will merge with Computer Sciences Corporation . The transaction is expected to allow Hewlett Packard Enterprise to focus on faster-growing businesses and unlock value for shareholders.
Furthermore, Hewlett Packard Enterprise’s strategic divestments and initiatives to return value to shareholders in the form of dividend and share repurchases are positives.
However, macroeconomic challenges and tepid IT spending remain near-term concerns. Competition from International Business Machines (IBM - Free Report) and Oracle further add to its woes.
Currently, Hewlett Packard Enterprise carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>