Hewlett Packard Enterprise (HPE) has emerged as a leading supplier of traditional HPC simulation machines following acquisitions of SGI and Cray. While Dell continues to dominate in general-purpose services, HPE is rapidly catching up in AI servers but faces challenges in profitability. Dell reported a significant increase in AI server sales in the most recent quarter, driven largely by Nvidia’s GPU allocations, although margins were negatively impacted.
In contrast, HPE saw its AI server sales more than double in the same period, reflecting the company’s extensive experience in supercomputing. However, Dell managed to secure more GPU allocations and revenue from AI servers. Both companies are striving to enhance profitability in the competitive AI server market, aided by Nvidia’s GenAI hardware.
HPE’s infrastructure pricing strategy, exemplified by GreenLake’s cloud, has been successful in attracting customers globally. With a growing customer base and expanding contract value, GreenLake’s revenue has shown significant growth. HPE’s core systems business, encompassing servers, storage, software, and support services, has also seen positive growth. Despite challenges in profitability, HPE remains optimistic about its prospects for the future.
Looking ahead, HPE anticipates further growth in its third quarter, driven by increased demand for AI systems and traditional servers. The company is focused on balancing the impact of AI systems on gross margin with higher service revenue margins and cost discipline. HPE aims to maintain an operating margin of approximately 11 percent for the fiscal year, anticipating continued growth in key segments.
Overall, HPE and Dell are navigating a competitive landscape in AI servers, with an emphasis on profitability and sustainable growth. Both companies are focused on leveraging their strengths to seize opportunities in the evolving market, while also adapting to changing customer preferences and technological advances.
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https://www.nextplatform.com/2024/06/05/hpe-is-also-having-trouble-making-money-with-ai-servers/amp/