Advizex CEO C.R. Howdyshell said the investment could open the door for competitors like Dell Technologies to grab share from HPE.
Activist investor Elliott Investment Management has built up more than a $1.5 billion stake in Hewlett Packard Enterprise, according to a report from Bloomberg.
The report of the investment — which comes with HPE battling the US Department of Justice to complete its $14 billion acquisition of Juniper Networks — sent HPE shares up five percent or 68 cents to $14.95.
HPE and Elliott Investment Management declined to comment on the report.
A source, however, confirmed that Elliott has built a $1.5 billion position in HPE and plans to engage with HPE to “create value.”
Elliott Investment Management has a long and storied history of activist tech investing aimed at driving shareholder value including activist investments in CRM software maker Salesforce, VDI software kingpin Citrix and even systems integrator behemoth Cognizant that resulted in changes at those companies.
C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company, No. 115 on the 2024 CRN SP500, said the Elliott investment and involvement with HPE could create concerns around “stability, consistency and predictability” that could open the door for competitors particularly Dell Technologies to grab share from HPE.
“Dell already has doubled down on its channel go to market,” Howdyshell said. “They are committed to growth through the channel. They have the portfolio to support all a customer’s needs from the client device to high performance compute.”
Howdyshell said Advizex is seeing “record growth” with its Dell Apex consumption-based offering which competes with HPE GreenLake.
The Elliott Investment Management investment couldn’t come at a worse time for HPE given the uncertainty surrounding HPE’s acquisition of Juniper Networks, said Howdyshell. “The DOJ blocking the deal has put a cloud of uncertainty over HPE,” he said.
Howdyshell said the big question with Elliott Investment Management’s involvement is what will change at HPE from a go to market and cost perspective. “Only time will tell,” he said. “I would expect Elliott’s response to be swift and specific.”
HPE said last month that it is reducing its workforce by five percent, or about 2,500 employees, over the next 12 to 18 months, with another 500 positions eliminated through attrition.
The job cuts are part of a $350 million cost reduction program that will be implemented over the next two years. HPE had 61,000 employees at the end of its last fiscal year Oct. 31, 2024.
HPE CEO Antonio Neri has said that the layoffs and expected attrition will “better align” the company’s cost structure to “business mix” and “long-term” strategy.
At the same time, Neri has repeatedly said HPE is totally committed to completing the Juniper Networks acquisition. “We believe we have a very strong case, and we expect to close that transaction in the second half of 2025,” he said recently. “The good news is the trial date is now set for July 9. We believe we have a compelling case to get a federal ruling.”
