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April 16, 2010

HP sticks in Fortune 500's Top 10

Fortune magazine released its annual rankings of American corporations today, and Hewlett-Packard maintained a spot in the Top 10 companies as measured by revenues. HP slipped one spot to No. 10, just as perennial leader ExxonMobil slipped to No. 2. WalMart leads the 2010 list with revenues of $408 billion -- and profits of $14 billion.

When measured against other computer makers on the list, HP's $114 billion leads by a comfy margin. The next three suppliers of systems: IBM at No. 20 ($95.7 billion) Dell at No. 38 ($52 billion) and Apple at No. 56 ($36 billion). The real trick in this kind of measurement victory is profits, however. HP posted $7.6 billion, while IBM earned close to twice as much at $13.4 billion on 20 percent less sales. (Dell eked out $1.4 billion, but Apple reported $5.7 billion.) In profits, HP ranks 17 and IBM is No. 5.

These numbers matter because HP touts them to prospects and reports them to customers, suggesting that bigger is a safer choice. HP 3000 sites who are choosing migration environments, or outsourcing the 3000's IT ops to major vendors, are encouraged to feel more secure in their own boardrooms because HP remains big.

The Fortune 500 is a phrase quoted often to measure the success of a system vendor's solutions, too. HP's partners invoke the F500 incantation as well, all to demonstrate that large-scale customers maintain their investments in HP solutions. In an American business sector much closer to the HP 3000's roots, the company says it services 1 billion Medicaid claims per year and manages $100 billion in assets.

Bigger sells less often with the smaller companies, however, that 80 percent of the 3000 community that will never get within shouting distance of a Fortune 1000 spot, let alone F500. It's not in HP's best corporate interests, profit-wise, to dominate its drive with a solution that satisfies small customers. (That's Microsoft's turf, for many of the 3000 migrators -- and the Redmond giant ranked No. 38 in the Fortune list while it posted even more profit than IBM, at $14.5 billion.)

The hard truth about selling information technology around the world is that 85 percent of all IT spending flows from the Global 500 corporations. It's also important to remember that today's Fortune list covers only US firms. Fortune's most recent list of international corporations -- which includes companies that don't consider the US to be home for their HQs -- ranks HP as No. 32 and five energy companies in the Top 10. Even Toyota is more than 20 slots higher than HP in the global economy -- as measured by sales.

02:51 PM in Migration, News Outta HP, Newsmakers | Permalink

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