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HPE will need to raise prices of server hardware to turn a profit

(Image credit: Image Credit: Hewlett Packard Enterprise)

If the server hardware business of Hewlett-Packard Enterprise (HPE) is to remain profitable, the company will soon need to increase its prices.

This was confirmed by Tarek Robbiati, HPE CFO, in a recent earnings call with investors, as reported by Computer Weekly.

Robbiati is alleged to have said that the cost of server hardware is partially dictated by the cost of dynamic random access memory (DRAM) chips, and thus the company will need to raise prices in the same way it did back in 2018.

For the third quarter of the year, the company reported net revenue of $6.8bn, representing a six percent fall, compared to the same period last year.

Revenue for its intelligent edge business is also down 12 percent, falling to $684 million, while its compute business remained pretty much flat at $3.4 billion. Storage revenue was also down 10 percent year-on-year at $1.1 billion.

On the other hand, its high-performance compute and mission-critical systems department reported a three percent rise year-on-year, hitting $649 million in revenue.

As with many other businesses, HPE claims the Covid-19 pandemic has caused a variety of issues, especially when it comes to installing large equipment.

“We have installations which are very large,” said Antonio Neri, President and CEO of HPE. “It takes many, many weeks. And, obviously, the global pandemic is not allowing us to have a lot of people on-site for cabling.”