Computing giant Hewlett-Packard Co. (HPQ - Free Report) or H-P recently announced that U.S.-based privately-held online payment processing company First Data Corp. will opt for its Converged Infrastructure portfolio. Financial details of the deal were kept confidential.
First Data processes payments through debit/credit cards, pre-paid cards, gift cards, Internet and mobile phones. It also provides fraud protection and authentication solutions, credit reporting agency services (through First Data Merchant Services Corporation) and electronic check acceptance services.
First Data will use H-P’s Converged Infrastructure portfolio for its flagship VisionPlusFlex, a software solution to enable financial institutions to promptly process and issue credit/debit, pre-paid and commercial cards. Leveraging H-P’s cloud portfolio, First Data will be able to enhance the scope of VisionPlusFlex. H-P’s technology will allow First Data to offer an appliance delivery model of the VisionPlusFlex software. VisionPlusFlex appliance is expected to be cost effective (as total cost of ownership will be lower and can be easily integrated into financial institutions’ existing systems) and highly efficient to securely process payments across the country.
H-P's Converged suites bring together servers, storage and networking products to manage data centers from a common platform. The Converged platform has been designed to make data center handling simpler, more flexible, efficient and cost effective. Close association with H-P is expected to boost First Data’s capabilities in handling growing demand for e-commerce and online payments as well as remain competitively ahead.
We believe H-P’s success with First Data will bring in similar deals as the exponential growth in the e-commerce field and online payments would require related companies to opt for advanced technologies to remain profitable.
Deal wins from different industrial sectors do not come as a surprise but winning deals in the storage, server and software areas is significant. While there may not be a remarkable increase in near-term revenues, it could ultimately offset the challenges in the PC business.
Currently, H-P has a Zacks Rank #2 (Buy). Investors can look at other companies, such as, SanDisk Corp. carrying a Zacks Rank #1 (Strong Buy), and Hutchinson Technology Inc. and Western Digital Corp. (WDC - Free Report) carrying a Zacks Rank #2 (Buy).