Hewlett Packard Enterprise Company (HPE) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the fireside chat with Hewlett Packard Enterprises. [Operator Instructions] It is now my pleasure to turn the floor over to your host Mehdi Hosseini. Sir, the floor is yours.

Thank you, Matthew. And I want to welcome everyone to our fireside chat with Antonio Neri, the CEO of Hewlett Packard Enterprises. Thank you so much for taking the time out of your busy schedule. We have prepared a set of topics and questions that Antonio and I will discuss. But before that, I'm going to turn the floor to Marcus to go over a few administrative things. Marcus?

Thanks, Mehdi. Before we start, just let me take a moment to read our disclosures. You'll hear some forward-looking statements in today's discussion. These are based on risks and assumptions that are described in our annual report on Form 10-K and 10-Q. Our actual results could differ materially, and we assume no obligation to update. More details can be found on our website, investors.hpe.com, and our recent Q1 earnings press release. So with that, I'm going to turn it back to you, Mehdi.

Thank you, Marcus. And Antonio, it's interesting times because you were the last company in enterprise hardware or storage that reported earnings. And perhaps you can tell us what's the most important message that we should walk away from your reported January earnings conference call.

Well, Mehdi, good afternoon, and good evening, everyone, or good morning, whatever you're around this day. Thank you for having me today. Well, I think I will say Hewlett Packard Enterprise had a very strong start to fiscal year '21. Our quarter was marked by strong profitability and record free cash flow. This is now our, I call it, fifth year as a separate company from the original Hewlett Packard. And I will say this was the most linear steady quarter in a while where our business performed fairly well. And when you look at our results, clearly, what stands out is our profitability, where we deliver in excess of 11% in operating profit. We beat the EPS guidance, the higher end of the guidance by $0.08 because of our operating leverage improvements, the mix of the shift that we are driving in the business and the cost actions we took early last year when the pandemic started. And all of that fueled what we call a record-breaking free cash flow, where we delivered $563 million in free cash flow, which was up $750 million from the prior year. We have a seasonality business embedded in our business, which generally tends to be the first half, a consumer of cash; the second half, kind of a generator of cash. But because of the action we have taken and the deliberate set of strategic moves, we saw that massive improvement. And I have to call a few areas where we have tremendous momentum, which I think is the future of the company. One is our Intelligent Edge business, which is our Aruba platform, which had a stellar performance with an 11% year-over-year growth, where we outgrew the market quite significantly. We just got the market share reports, and we gained share both in campus switching and wireless. In some cases, in the switching side, we've got 360 basis points of share. That came all at the expense of Cisco. And the same with wireless, okay, all at the expense of Cisco. So our value proposition there resonates dramatically, and we see the future as the next frontier. And in the core business, we see signs of the stabilization on the Compute and Storage because there is pent-up demand built in the market as we see the recovery. And then we had a strong order book for our HPC business. And while that HPC business declined year-over-year, it's nothing more than a timing issue. Because I just want to remind everyone that we can only recognize revenue in that business once we ship it, install it and run the workload; versus the rest of the business, we ship it then we recognize revenue. But there, we have more than $2.3 billion in awarded business, which we will have to install and materialize over the next 18 months. And some of them include the largest supercomputers ever built at the exascale kind of solution. So exciting. And then I will say, our north star for our long-term strategy is to pivot everything as-a-service And GreenLake business is truly differentiated in a hybrid context way, which is growing again. This quarter grew 26%. Our ARR, which is the metric we share with the Street every single quarter was up 27%. So we feel good about our strategy to stabilize, transform the core, double down in the growth area and pivot everything as-a-service.

Great. Thanks for that summary. It is certainly interesting times when we think about your cost structure. You have highlighted cost optimization and prioritization plan. And we're also beginning to think about the post-COVID. So how do you see HPE's operating margin and operation trending forward, especially in the context of growth coming back for different parts of the company and also combined with cost optimization? So you have growth, you have lower cost, and how do you see both coming together?

Yes. I think if you go back to our Security Analyst Meeting last October, we laid a clear thesis to drive shareholder value through long-term, sustainable profitable growth. And obviously, we are a unique company because we have a series of assets that really play well for the future. And the future is what we call a combination of edge computing and cloud computing, and that's where we have established a vision for ourselves to become the edge-to-cloud platform-as-a-service company. And this cost optimization and reallocation of the resources is to drive operating leverage in the core business in Compute and Storage, while we'll reinvest into the areas of growth: Intelligent Edge, data through AI, machine learning, automation, hybrid operating models and ultimately, the as-a-service pivot. And all those markets maybe are growing. And so the digital transformation we all live today is being accelerated. COVID has basically shown the light that you got to participate in this digital economy. Think about what we do in our personal lives, right, ordering food to getting the food deliver home, transportation, you name it. If you don't participate in the digital economy, you're not going to succeed. And the first step is connectivity. If you are not connected, you can't drive digital transformation. And that's where that Intelligent Edge business is so powerful for us because it is a software-driven architecture. It is a mobile-first, cloud-first architecture. And it is where the action is because more than 50% of the data is created where we live and work. So we have a unique value proposition there to provision cloud in a secure way, provision connectivity in a secure way from the cloud. And then in the core business, we are pivoting to what we call workload-optimized solutions while adding more software to expand margin and then continue to drive the pivot to as-a-service. So as you will see in the next quarters, we are executing a very aggressive innovation agenda that we continue to bring to the market. And I expect those businesses continue to do very well, and then continue to really drive that operational leverage. We are very maniacal about that. We have done it in a way that is sustainable, and we are very pleased with the outcome so far.

And before we get to business unit, I have one more big-picture question. And going back to your reference to digital transformation, I see Kubernetes also as a significant demand driver. So I want to better learn how HPE is positioned for cloud-native and particularly Kubernetes? And what areas of your business are tied to customer adoption of Kubernetes?

Well, there's no question that customers are adopting more and more cloud-native technologies, right? It starts with all -- the digital transformation starts with your apps and data. The value of your business is there. In particular, data because it's your intellectual property. And technologies like Kubernetes, or container-based, allows you to operate in a hybrid environment at a scale -- at scale and in a very efficient way. But the world is hybrid. You will have applications and data on-premises, more and more at the edge and obviously, in a cloud. And for us, cloud is not a destination, it's an experience. And this is where we start with that premise in mind, and we bring the cloud experience to your -- to all your apps and data, where ever they live, and that's the core value proposition of HPE GreenLake, which is HPE GreenLake Cloud Services, brings the hybrid experience to you in a consumption-driven model through services-oriented, consumption-driven model. What powers that GreenLake Cloud Services is a series of workload-optimized solutions, more and more in a cloud-native approach where containers are the runtime of these solutions. And so we invested not only what I call the hybrid control plane fleet management, which customers want a consistent experience, but also what I call in the runtime to really optimize the full stack for those workloads. Take an example. Whether you deploy backup recovery or you deploy AI and machine learning operations-as-a-service, so you deploy containerization for developers of virtualization. We developed the runtime in a way that reduces CapEx upfront. That's why we have an offering called HPE Ezmeral, which is our software stack. Think about a parallel to a VMware or Red Hat OpenShift but it's in a modern architecture. And what that does, it allows customers to run legacy applications and cloud-native applications in a container base in the same stack. Which means customers don't need to spend CapEx in creating solid infrastructure. The second part of this is that we invest a lot in automation. Automation, automation, automation. And we have assets like BlueData storage and HPE InfoSight, where basically, we automate all the actions that runtime needs to take in a predictive way. So we embedded AI in the stack. And that helped customers reduce OpEx. And then last but not least, since we talk about data, is how we extract insights from the data as fast as possible. I have a say, the future belongs to the fast. And today, as enterprises, we only extract maybe, at the most, 10% of the insights of the data. We integrated another acquisition we did, called MapR, which is a massive-scale data fabric that allows you to process trillions of data points at scale. Think of an example of a workload like Splunk, where financials institutions need to run compliance on the data. Instead of moving all the data to the public cloud -- which is an enormous cost, right, and it's like checking in Hotel California, you check in and never check out. We leave the data there. We make it compliant, and we'll run those analytics real time and you pay only for what you consume. That's the value proposition, and we are seeing tremendous traction, Mehdi, where we've seen that business growing high double digits in software. And that's a combination, not just for traditional workloads, but cloud-native workloads and then enabling the pivot to as-a-service.

Great. Now I'm going to pivot to Edge, Intelligent Edge, which I think is the fastest growth business unit. What exactly drove the upside to January quarter expectation? And how do you see the growth -- or how do you see HPE benefiting? How much of your performance is end market growth? And how much of it is you gaining market share?

I think the vast majority is us getting market share. The market is still in recovery there. I mean, if you look at our biggest competitor, even though they don't break down the hardware segments between switching, wireless and others and leave it for the server they have, that entire infrastructure, they declined 16% year-over-year. We grew 11%. So -- and if they are kind of 50% of the market share today, they have a huge influence on the market growth rate. So I will say the vast majority was all share shifting to us. And the reason why that happened is because we have a modern architecture. And what customers love about Aruba is designed for driving this digital transformation, as we talked before, right? The first step is to provide connectivity in this new way to operate. Think about it, you do a lot of your work today with your mobile phones or an iPad but the reality is that you need to provide secure connectivity before you can establish a new set of workloads -- workflows. And Aruba enables all that. From the cloud today, with 3 clicks, I can provision in your house an access point. You don't have to do anything. Just plug the cable. The cloud recognizes the access point. The IT department in your company doesn't need to worry because all the right policies and the right services for Mehdi gets deployed immediately from the cloud to you. And they subscribe per access point or per port in a switching base to that connectivity. And we embed security and analytics to improve the experiences of the workforce. Or whether it is in a hospital, whether it's in transportation or manufacturing, you name it, we have verticalized solutions there. Obviously, the pandemic helped a little bit because we had to deploy massive distributed enterprise everywhere. But remember, at the same time, this is technology that works in the campus and branch. And the way I think about the future is that, obviously, you have your campus. Think about your large corporation. You have branches potentially around the country. And now you have these micro branches, which are your home. I could think about your home as the micro branch extension. We can do that in an automated and autonomous way. Also, we completed the acquisition of a pure-play SD-WAN because today with Aruba, you had wireless and LAN connectivity. Now we are adding SD-WAN point-to-point connection. You asked me earlier on the cloud-native world. As more cloud-native applications get deployed, the traffic of that connectivity for those cloud-native applications will go through the Internet, not through this massive, expensive, fixed networks. And now we can provision point-to-point connectivity at scale for the micro branches and the branches and enterprise, which basically says I can connect all your edges and all your clouds in an autonomous way. And also pay on a consumption-basis model versus invest all that cash upfront. So I say, Mehdi, this is going to be a fantastic year for that business for us. Super bullish and excited because we have a completely differentiated value proposition.

Would that also give you a competitive advantage as just the edge compute is being installed? Like what you described to me seems like a beginning of the adoption of edge compute, correct?

Well, I think about where we're coming from, right? So some of us grew up in the mainframe era, right? So that was a centralized model. The terminal used to be that green screen and that it is working. By the way, it's still alive, right, for many of the mission-critical applications. Then we went to what I call the data center computing area, where we brought that capacity in a more scale-out architecture and commoditized set of components over time. Now we are in the cloud computing era, where obviously, you have components in the public cloud, and now you're cloudifying your data center solutions where it makes sense. And now we are moving what I call the edge computing area. Obviously, with the deployment of 5G, we're going to see the availability of the mobile edge computing closer where the action is, where the connectivity takes place. You have a potential 5G antenna that has the ability to process data right there, closest to you. But then there is the far edge, what I call the far edge, which is could be a hospital. It can be a manufacturing floor, it can be an oil and gas well, you name it. And we will see now is the push of cloud competing to the far edge because whether it's latency, compliance, you name it, there is a need for that to process the data where the data is created. And also actually, it's cheaper to move the cloud to the data, not the data to the cloud. And that's why we see this emergence of [ H2 ] cloud architectures. In our control plane, what we're doing is adding in edge computed for specific verticals. And also, you're going to see the integration of 5G. Customers are telling me, Antonio, love your experience with policy management for wireless, Wi-Fi 1. Why don't integrate 5G so I have one control plane? So we are doing both, and we are integrating both in the next 12 months.

Okay. If I were to just focus on Aruba, how would you describe addressable market today? And where would it be 3 years from now?

Well, today, Aruba has been recognized more as a connectivity company, right? It came from a networking-centric approach. In the future, my vision is to become the digital transformation company where we embed compute and cloud technologies into the network. And we also integrate AI to process data at the speed of where things are connected. So that's the vision. That's what we are driving. And there are some emerging wonderful technologies, which, by the way, some of them are developed by ourselves. Because we have intellectual property that will enable us to really manage what I call this massive distributed world in a decentralized, centralized world where data becomes the core of what we do.

Okay. But is there any way we could put some number around the size of the market today?

Well, I mean, listen, if you look at the market today, what we're covering today is roughly $40 billion in that part of the business as a TAM between the traditional networking. But once you add the data, what you're doing is expanding to more than tens and tens of billions of dollars, right? And compute generally tends to be $50-plus billion, it's almost $60 billion TAM. But you have to look at the segmentation of the market, right. Not all markets are created equal. And that's where one of our crown jewels capabilities is high performance computing and how we bring that level of capabilities in the deep learning and AI into the smaller way to do things. So we have all the technology to rearchitect these [ H2 ] cloud world over time.

And before we move on to the next business unit, can you remind us how acquisition of Silver Peak fit into Intelligent Edge? And what are the key milestones that we need to be on a lookout for?

Yes, we completed acquisition at the end of September 2020. It's now part of the Aruba portfolio. SD-WAN is the software-defined wide area network. In the past, when you -- let's say you were a retailer, you opened a new store. You needed to work with a lot of the telecommunication providers to establish an MPLS circuit, a direct connectivity to the store in order for them to connect to your data center or the cloud. Now with the software-defined wide area network, we can use the Internet backhaul to connect the store. And at the same time, take an application-centric approach, not just a network connectivity approach. So let's say, you opened a new branch in town X. We -- as long as you have Internet connectivity, we can provision all the services with a push of a button. And what it also does is self manage in a sense that you define what parameters you want to establish for that store, what type of service levels, which application first, second, third. And that basically is an autonomous way to manage that connectivity, which is way cheaper than the previous way. So now it's been integrated with our Aruba Central, which is our cloud control plane we talked before. And we see tremendous opportunity in the enterprise, but at the same time, also with our MSP partners. Because more and more, they need to provide a comprehensive set of services, and we have that technology that enables them to do so as well.

Okay. So it's very -- it's basically very complementary to Aruba, and this would enable you to build out that edge differentiation that you have and eventually turn it into edge compute. It's part of a longer-term goal, right?

Absolutely. I mean if you think about it, SD-WAN 3 years ago was a very small market. Today, it's in excess of $5 billion. So what we're adding here new TAMs to our already large TAM. And obviously, we have obviously an aspiration to take 20% of the share. Think about now over a $5 billion market, take 20% of the share, that's $1 billion opportunity for us.

Yes.

Just on that part of the market. But again, not as a silo solution, but as a part of our platform solution. What we are doing is platform integration in a subscription-based model.

Yes. Got it. Now shifting gear, focusing on storage. Can you help me understand how big do you see all-flash array market? And what is your market share there?

Yes. So Q1 was a good quarter for us. We had a good performance in our, what I call, our focus areas, what I call software-defined on the IP areas, with an amazing operating profit performance. On the software-defined areas, which includes all-flash, obviously, we have products like HPE Primera growing triple digits, products like Nimble dHCI, which is a new architecture for hyperconverged, which also grew high double digits. And then all things related to software-defined also grew double digits. But we were able to deliver all of that with a 19.5% operating profit, which was already on the higher end of our guidance from the Security Analyst Meeting. Our all-flash grew 5% year-over-year as a combined portfolio, and our market share generally rose around between 10% and 12%. But as we go forward, we expect our market share to grow in the areas where we are investing because part of our portfolio, Mehdi, is reselling third-party options that customer wanted. But it's a good business because we have no OpEx, but it's all profit. But in the end, we got to continue to pivot to these new architectures, which customers want and need for the data storage and analysis.

Sure. Now looking to future, how should I think about HPE's advantage? Are you able to gain market share or benefiting from a product cycle or installed base upgrading or all of the above?

I think it's all of the above. Obviously, we expect a recovery in the market. Generally, there is delay. We that have been in the business understand what I call ratios of attach between compute and storage, right? The fact of the matter, a server is connected to a storage because that's the architecture of storing data and processing data. So we expect the storage market to improve. As that improves, also, we expect to gain traction in the new way data is stored because it's no longer about the appliances. It's about data services that ultimately provides the ability to process data much more quickly in a hybrid environment. And then obviously, there is the cloud architecture that comes with it. So all those are in favor of us. But also, there is one multiplier, one multiplier factor that also we need to remember, which is our pivot to as-a-service. When we land a storage or compute in our as-a-service engagement, the margins are higher and the services attached are much, much higher, 100%. In this past quarter, not only we increased the services intensity attached to the storage solution, but also, we increased in the number of storage deals as a part of GreenLake. And that's all fueling growth in the as-a-service, but eventually is a pull-through for storage, too.

Okay. Now shifting gear, focusing on compute for now. I believe you have guided to a 3-year model for flat revenue and operating margin in the low teens. What are the key assumptions for market share and your investment? And again, this is compute area.

So on the compute area, right, is about focusing on profitable segments of the market. And in that, we see traction in several areas, number one. And I'm talking about general compute, not high-performance compute, right? So on the general compute, we focus on telecommunications, telco. Telco is a big opportunity for us because of the deployment of 5G. And in that space, we own more than servers. I think the Street need to understand that we also own the software that you need to run 5G in the core. What that means? You need compute, you need virtualization, you need orchestration, and then you need what we call the virtual functions, which are the services running on top of this that ultimately enables the 5G. Hewlett Packard Enterprise owns 6 of the key 20-plus virtual functions. And in fact, those software capabilities are deployed in customers like Verizon, AT&T, but call it the top 40 telecommunications around the globe. That's a point of differentiation. And just 2 weeks ago, we introduced the first Open RAN architecture with our server, software and our virtual functions. So telco is one. Obviously, SaaS companies. What SaaS companies are realizing, those who've moved in the cloud is that yes, they want to ride the innovation of the public cloud. But at the same time, they don't want to pay the tax to the public cloud to run their workload. And so there is a repatriation in a lot of the SaaS companies at scale on-premises because it's cheaper for them. So that's another segment of the market that we are focusing on. And so when I think about where the growth is going to come, it's going to come from that. And then obviously, there is an installed base management in enterprise. And then as people modernize and cloudify their infrastructure, that's an opportunity for us. But there is the puts and takes, right? That's why we guided for compute only flat, but with improved margins because of the mix shift and the cost actions we have taken in the business.

And perhaps some of these key differentiations or focus that you highlighted makes you special. In other words, Nokia and Ericsson can't just go and have Taiwanese-built servers for them and for them to integrate. But you can collaborate with those telecom equipment companies to enable O-RAN or to add value. Am I thinking about this the right way?

Absolutely. I mean we have the case of partnership with both of them. In fact, many of the solutions already have Hewlett Packard Enterprise services inside their systems.

Right. Okay. And again, this is how you're going to leverage your edge and Aruba to get into compute edge. These are the key enabling factor to be able to realize synergies.

Yes. I mean listen, each -- obviously, each service provider is taking different approaches for what it makes sense for them. A great example, Verizon right here in the United States, is very aggressive deploying 5G. And in that, obviously, the virtualization, the radio [ ax ] network is a key component of that, and we are partnering with them on that deployment, which basically means you need to have an edge compute. If you look at AT&T, perhaps a different story, but they are very much focused on deploying a full set of services for their customers, for enterprise and SMB customers, where they are the single pane of solution in many ways. And our Wi-Fi solution is part of their portfolio, which is branded AT&T, but it's Hewlett Packard Enterprise, Aruba. So depending on where you are, you're going to see what their strategy is, right? We may partner more on Aruba or more on the compute side. Or in some cases, we actually enable them to deploy these new standards, which is happening in some accounts. We are doing, for example, right now a POC with Orange, where they want to really go into this new standard way, which is called open 5G. So we have a broad set of portfolio, Mehdi, that we can play in different spaces depending on their strategy.

Okay. I have 2 quick follow-ups on compute before we move on high performance compute. So 2 things -- 2 follow-ups. What is memory-driven compute? And the second question, as it relates to cloud or hybrid cloud, do you expect any repatriation reemerging later this year if cloud pricing doesn't change? So 2 different questions, but 2 follow-ups.

Yes. Yes. And I don't want to get too technical here, just trying to make it simple. So today's compute architecture are 70-plus years old. Obviously, we grow up watching movies with Alan Turing and others, right? So it's the same concept. There is a CPU, a compute processing, which has been the center of the architecture. You store data in a storage, which is whether it's flash or whether it is a spinning disk and then you process the data through the memory into the CPU, and you give the outcome. That has been the architecture, which obviously we live in this, what we call the Moore's law, more transistors and in smaller sizes, but ultimately, still have a challenge, which is basically the power cost envelope. And then obviously, when you do it at scale, you think about large data scales -- data center scale, so cloud data centers, you start running out of space and out power and so forth. We have different technologies that we have been developing, which is called memory-driven compute, where basically, we collapse the memory and the storage, and we put that at the core of the architecture, not the CPU. That becomes the center of the architecture because it's all about data. And instead of moving data between memory, CPU and storage, we keep that data at rest. And because it's at rest, we don't need a lot of power to stay alive. So remember, what happen now, if your PC crashes, you lost the data if you didn't save it. If in that case, you never lose the data. And then we bring the right compute into the data. So whether it could be an x86, a CPU or an accelerator or GPU or it can be a narrow base. In the future, it can be even quantum computing. So we have been developing this, and a lot of what we have done is contributed to the open source. Because this is a new way to run compute in a memory-driven approach and also a new way to write applications. We believe that's a long-term direction because as the data growth is outpacing the past the compute power. On the -- your second question was about HPC, right?

No. Actually, quickly, it's more to do with topic of repatriation.

Repatriation, yes, sorry. Yes. I mean, listen, it goes both ways. This is an interesting part. We think about this in workload terms, right? Our workload can be one application or multiple applications. But we have workloads going to the public cloud, we have workloads coming back on-prem. That's why the world is hybrid. But what customer wants is a consistent cloud experience and operating model, where applications are designed in a way that you can move apps back and forth where it makes sense. And also be able to make the right decision where the data should gravitate because data has gravity. And in that context, I will say, that's why our HPE GreenLake business is so critical because we bring the cloud to them, doesn't matter where it lives. And we see that going on. But what happened is that DevOps, right, it was the easy thing to move to the public cloud, and then obviously, cloud applications that were born in the cloud. But now what we're seeing is with our production-scale level, the customer's biggest decision is should I move that data to the public cloud. Because once you move it there, it's that joke I made earlier, you check in, you never check out. Egressing data back in on-prem is incredible expensive. So it's not about the cost of compute. It's about cost of egressing data back and forth. And that will change. And our focus is really focus on those workloads that has the biggest propensity to stay on-prem or go to the edge because of the data gravity.

Okay. I have 45 seconds. I'm going to just give you 2 more questions. First, from a big picture, how should I think about today's mix of software or software as a mix of revenue? And how would that mix change in the next few years? And number two, and is there an update on your M&A philosophy?

Yes. I mean listen, software will continue to be a bigger part of our portfolio. But I think about software not only in the context of selling subscription software to run things, like HPE Ezmeral, but software in the context to make our solution, our products, a solution-oriented approach, where the runtime, the automation, the orchestration, the analytics are part of a solution, which eventually we can sell as-a-service in a platform-oriented approach. So we have multiple things going on here. But the thing you need to remember is that everything in software will be subscription-based. If you want a runtime, we could subscribe to that, but more and more will be integrated in a full stack because customer wants block of IT. They don't want to put this stuff together themselves. So that's on that one, and we feel pretty good about the progress that we have made on that front. And the second part of your question was -- remind me because I just -- I want to make sure...

It was more of the update on your M&A philosophy.

Oh, the M&A, yes. The M&A, listen, we have been very consistent. I have done 19 acquisitions in the past 5 years. And they all have been with incredible discipline, return on -- very stringent return on invested capital. What is the best return for our shareholders while we think about positioning the company into the future. The fact of the matter is that this is a business that move at lighting speed, and innovation is the lifeblood of the company. And we cannot innovate everything ourselves. So I think about innovation in 3 forms: organic, inorganic and through partnerships. We have a very vibrant partnership ecosystem. But obviously, you want to own more and more IP. So when I think about M&A is the shareholder return on one end, the long-term ability to execute by bringing the right IP, intellectual property, and talent. Because talent is very important here and new talent, not the old talent. And so we continue to assess what is best for us. As you know, maybe as some of the valuations out in the market are particularly high, which makes no sense, so we hold ourselves accountable to that discipline. And we like the Aruba like, right? I mean, we have done -- that was my first acquisition. But in between, we did Cray, we did SGI, we did SimpliVity, and we did most...

And the Nimble. Nimble was a bought one, too.

Yes, exactly. So -- and it's important that you understand in the case of Cray, which I think maybe people don't fully comprehend. Cray is not a hardware company. Cray is a silicon and software company. It just happened to build the largest system on the planet, but you can't do that without the silicon and without the software. And in that space, we own the entire stack.

Yes. And unfortunately, we run out of time. Otherwise, we could have dived into high performance compute and mission -- but it is -- I'm actually very excited to hear how different parts of the company are coming together. And now is like there are several synergies going on. So with that, I want to thank you for taking the time out of your busy schedule. And I want to thank the HP IR team. Marcus, thanks for helping me to make this happen. And for investors on the call, if there is any follow-up, feel free to shoot me an e-mail, [email protected], especially if there is any follow-up. Antonio, best of luck. And again, thank you so much. And I look forward to having these calls in the future.

Thank you very much for having me today, and I hope everyone stay safe and well.

Operator, you can close this.

Absolutely. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.