The State of Virginia Department of Motor Vehicles lost access to its IT systems for hours this past Saturday as a result of a data center outage that disrupted network access for more than 60 state agencies.
Caused by a faulty network switch, the outage was resolved about five hours after it started, Richmond Times-Dispatch reported. The data center is owned and operated by Northrop Grumman, which resolved the issue by replacing a faulty part with one from a test environment that was running in the facility.
The switch failure “caused a widespread outage of inbound and outbound communications traffic through the information technology infrastructure for executive branch agencies,” Marcella Williamson, spokesperson for the state’s IT agency, told the Times-Dispatch.
The defiant math of Radiohead's song "2 + 2 = 5" can now be found in an enterprise storage system called IRIS from Symbolic IO. With IRIS, which stands for Intensified RAM Intelligent Server, the whole is greater than the sum of the parts. That turns out to be an advantage because you can allocate less storage space for the parts than they'd require as a single set.
The four-year-old company, founded by CEO Brian Ignomirello, who served as CTO of HP, claims it has found a way to store data in substantially reduced form and to retrieve it without any loss in random access memory (RAM). Symbolic IO's technology, which the company says is the first computational-defined storage product, thus amounts to magic, in the sense that "any sufficiently advanced technology is indistinguishable from magic," as author Arthur C. Clarke put it.
Indeed, Symbolic IO describes its storage system in magical terms when it refers to IRIS "'materializing' and 'dematerializing' data in real-time."
(TNS) - Federal officials on Monday announced new procedures for flood insurance policy holders to file appeals and internal steps to exert more control over the process following complaints that private contractors underpaid claims after superstorm Sandy.
The changes come amid lawmakers’ and homeowners’ continuing criticism of the way claims and appeals are handled by the FEMA's National Flood Insurance Program and the private insurance companies it contracts with to carry out its work.
“Fundamental changes need to take place in this program,” said Roy E. Wright, the flood insurance program administrator. He said he was rolling out “three elements” that would go into effect later this year in what he called “a long-term process.” Wright said they include:
(TNS) - The John F. Kennedy assassination, the 9/11 terrorist attacks and the Berks County hailstorm of May 22, 2014.
Like the where-were-you aspect of two infamous episodes in U.S. history, the savage hailstorm that hit a small piece of the county slightly more than two years ago has become an unforgettable moment in the lives of those who experienced it.
"It just seemed like the whole world was coming apart," said the Rev. Mark Johnson, pastor of Bausman Memorial United Church of Christ in Wyomissing. "When I came out, my Honda Civic was dimpled up like a golf ball."
The memorable storm hit on a Thursday afternoon. Hail reported as the size of golf balls or larger fell from 2:45 to 3:30 p.m., followed by a second hailstorm within an hour.
New cabling solution accommodates current and future requirements in splicing, termination and high fibre counts
WETZIKON, Milpitas – R&M is introducing Anaconda, a high capacity fiber distribution system designed to meet the demands of modern data center environment. The system offers unparalleled flexibility to accommodate today’s major termination techniques and high fiber count cables.
Rapid growth in the volume of data being stored and managed in data centers in recent years has lead to a need to realize maximum port density in the smallest available space. However, increasing density often results in unmanageable cabling.This makes Moves, Adds and Changes (MACs), cable tracking and fault-finding impossible.Anaconda has been designed with the challenges of a managing a future-proof data centerin mind, targeting ease of use and flexibility in an increasingly high-density, complicated network environment.
Components are assembled in the US,preassembled, dressed and labeled for fast deployment and available in 19” and 23” rack mountable versions with large 2.5” (63 mm) cable entry and routing ports.Solutions are factory scalable to over 3,456 fiber ports, in 288 port 3RU increments. The heavy-duty chassis construction is forged from 0.090” aluminum or cold rolled steel, with a powder coat that offers maximum protection indoors and outdoors.The rack module offers internal slack storage for incoming cable and trunks.
Another benefit of the Anacondaand theuniversalcassette is that it can be removed while the panel is deployed. An external steel breakout box and cable clamp assist and protect cable entry into the panel. This is especially important when incoming cables have a large diameter and high fibre count.It allows the user to breakout the cable outside the panel rather than inside.Taking advantage of this unique feature, the user can work with much smaller cable diameters inside the panel. Loading is assisted by a unique removable cassette handling cradle. Medium density 3RU, 288 fiberdesigns allow for the use of standard LC-duplex patch cables. Termination options include MTP® cassettes, direct termination of field installable connectors, fusion splicing in a 0RU splice shelf in the rear of the cabinet and splicing inside of the splice cassette.
Anaconda’s modularity makes it possible to very rapidly create assembliesfor any type of configuration requirement. In most cases,the termination cassette is configured as a pigtail and routed to the splice tray shelf in the rear of the panel, saving valuable rack space. Having the splice tray shelf in the rear of the panel allows fusion splicing in an 864 fiber shelf to be in approximately four hours. End users can define the location of the splice tray shelf (top, bottom, or middle)- especially practical when you need to splice 1,728 or 3,456 fibers. Splice tray shelves can be located close together, allowing easy routing of the incoming cable’s fiber bundles into the shelf stack. The remaining rear shelves of the other units remain mostly empty can house the slack of the incoming cable.
Future-proof your data center
R&M has specifically designed its new solution keeping these challenges in mind. “Anacondawas developed on the basisof close analysis of customer needs in relation to today’s growing fibercounts and flexibility requirements,” concludes Thomas Wellinger, Market Manager Data Center at R&M.“By eliminating the time needed to splice at one location, Anaconda can help complete projects rapidly and at a lower total cost.” For further information, please visit www.rdm.com
R&M (Reichle & De-Massari AG) is a leading global producer of future-proof products and systems for communication and data networks. The company's close collaboration with certified partners results in pioneering connectivity solutions in the sectors LAN, Public and Telecom Networks as well as Data Centers. The Swiss family company stands for innovation, quality, and customer proximity. More information can be found at www.rdm.com
New ReliaTel as a Service Delivers Comprehensive Cloud-Based Management for Avaya Aura, Avaya IP Office, and Cisco Unified Communications Manager
Empowers Organizations to Align Business, Operations, and Service Goals for Unified Communications and Collaboration, While Driving Higher ROI From UC Investments
ANAHEIM, Calif. – Tone Software Corporation, a leading provider of comprehensive unified communications and collaboration (UC&C) monitoring and management software for advanced collaboration ecosystems, today announced the new ReliaTel as a Service cloud-based management solution for UC&C environments. The ReliaTel as a Service (RaaS) solution provides comprehensive UC&C management from a dedicated and secure cloud-hosted instance, delivering deep visibility and control over quality and performance of Avaya Aura, Avaya IP Office, and Cisco Unified Communications Manager architectures that are configured on premise, in a hybrid premise and cloud combination, or through a unified communications as a service (UCaaS) model. The new ReliaTel as a Service offers rapid deployment, reduced operational support overhead, and a pay-as-you-go consumption model that eliminates capital budgetary barriers and ensures lower total cost of ownership for critical UC&C service assurance. As a result, organizations have the flexibility to align their UC&C service assurance model with business and operational needs, while also increasing quality, performance, and ROI from UC&C technologies.
Businesses today are embracing hybrid UC&C and cloud-driven UCaaS deployment models that deliver significant financial and operational efficiencies. These UC architectures typically span multiple technologies and rely on assets that reside outside the traditional premise network, creating additional management challenges for the IT and Operations teams responsible for UC. ReliaTel as a Service address these issues through real-time management and visibility over the entire domain stack of premise-based UC assets and transport layers, as well as cloud-consumed UC&C services.
"The new ReliaTel as a Service solution delivers the deep visibility and control required by today's UC&C architectures, without the IT burden of hosting the solution in the premise environment," stated Perry King, Director of Product Management for Tone Software. "Through ReliaTel as a Service, UC teams gain a highly scalable, efficient, and cost effective methodology to manage their UC&C ecosystem, with all the convenience and economies that cloud delivery provides," he added.
Visual360 Provides Exceptional Value for ReliaTel as a Service Users
For Avaya environments, ReliaTel as a Service delivers exceptional value through the ReliaTel Visual360 intelligence portal to visualize real-time UC quality, performance, and service level analytics correlated with operational and network conditions throughout the UC environment. Through Visual360, operations teams have the significant advantage of visualizing the relationships between devices, applications, and network segments involved in UC session paths to rapidly pinpoint the true origins of UC quality, performance, and service level degradation. As a result, UC teams can reduce the triage time required to diagnose UC issues by fifty percent or more, and utilize the integrated Visual360 analytics and remediation capabilities to quickly and accurately resolve issues -- all within one powerful, visual portal.
ReliaTel as a Service Delivers Operational Advantages
The ReliaTel as a Service solution is provided through a dedicated, secure AWS host instance that is initiated and maintained by Tone Software. Initial implementation of management services is included for new clients, and clients have full administrative control of all ReliaTel management capabilities to expand and adapt the ReliaTel cloud-hosted solution as their UC environment evolves. ReliaTel as a Service fully supports the multi-tenant environments necessary for Managed Service Providers (MSPs), and includes the ability to provide segmented secure views to individual clients through the cloud-delivered re-brandable web portal. Through ReliaTel as a Service, MSPs and IT teams enjoy the full scope of ReliaTel UC service assurance functionality, without the operational support burden of maintaining the host environment.
Consumptive Model Makes ReliaTel as a Service the Perfect Budget Fit
Businesses today often consume UC&C on a pay-as-you-go basis, and ReliaTel as a Service enables organizations to consume UC&C service assurance in this same way. With licensing options by seat and by end point, ReliaTel as a Service scales as the UC environment changes, and organizations pay only for what they need, when they need it. As a result, ReliaTel as a Service delivers significant budgetary advantages, eliminating the need for costly up front capital expenditures, while leveraging the flexibility to easily scale the solution as the environment changes.
Avaya Users - Learn More at IAUG Engage 2016 in Orlando - Booth 418
Both the new ReliaTel as a Service solution and ReliaTel Visual360 will be available at Booth 418 at the upcoming International Avaya Users Group (IAUG) Engage 2016 conference in Orlando, June 5th through 9th. Avaya users will have access to demonstrations of the powerful new ReliaTel Visual360 capabilities, including an extensive array of analytics and capabilities pertinent to Avaya UC collaboration environments. For information on IAUG Engage, visit www.iaug.org.
About Tone Software
Tone Software Corporation is a global provider of comprehensive monitoring and management solutions for advanced communications and collaboration ecosystems. Tone's ReliaTel solutions provide managed service providers (MSPs), UC as a Service providers (UCaaS), value added resellers (VARs), and enterprises with a unified approach for managing and monitoring their entire communications and collaboration environment, supporting the industry's leading devices, networks, and applications from multiple vendors on multiple platforms. By unifying multi-vendor UC, SIP, and collaboration management in one solution, ReliaTel provides the ideal platform for organizations that must cost effectively manage the quality, capacity, service levels, and user experience of the critical communications and collaboration systems that drive their business. For more information, go to www.tonesoft.com or follow Tone on Facebook or Twitter.
Cloud Billing Leader Acknowledged for Stringent Standards That Safeguard User Privacy and Personal Information
SAN FRANCISCO, Calif. – Aria Systems, which helps enterprises grow recurring revenue, today announced that it earned the prestigious TRUSTe Certified Privacy Seal. This certification demonstrates that Aria Systems has successfully fulfilled TRUSTe's rigorous program requirements and provides the highest level of protection to safeguard user privacy and personal information. This is the second TRUSTe certification for Aria Systems since 2014.
The Aria Cloud Billing and Monetization Platform has met multiple rigorous requirements to ensure the highest levels of privacy, security and transparency, including: HIPAA certification, which assures healthcare organizations of patient privacy and data protection standards; the Payment Card Industry Data Security Standard (PCI DSS); the U.S. - EU Safe Harbor framework, and the U.S. - Swiss Safe Harbor framework for the collection, use and retention of personal data.
"The continued TRUSTe certification demonstrates Aria's utmost commitment to transparency, compliance and privacy," said Oleg Ganopolskiy, CIO, Aria Systems. "Our privacy and security standards go above and beyond industry norms, giving our enterprise customers the confidence that every product initiative can be launched with the safety and scale that the market demands."
About Aria Systems
Aria Systems' cloud billing and monetization platform is the consensus analyst choice, top ranked by Forrester, MGI, Ventana and TEC. Innovative enterprises like Adobe, Philips and Zipcar depend on Aria to accelerate time to market and increase flexibility, enabling them to maximize customer value and grow recurring revenue through subscription and usage-based offerings. For more information, visit: www.ariasystems.com.
Aria Systems and the Aria logo are trademarks of Aria Systems, Inc. All other trademarks are the property of their respective owners.
Brocade Workflow Composer Transforms IT Operations With DevOps-Inspired, Cross-Domain Network Automation to Increase Business Agility
SAN JOSE, Calif. – Brocade (NASDAQ: BRCD) today announced Brocade Workflow Composer, a new server-based network automation platform that enables enterprises and cloud service providers to improve their IT operations and drive greater business agility. Brocade Workflow Composer provides DevOps-style network automation for provisioning, validation, troubleshooting and remediation of multivendor networks -- while integrating with workflows across multiple IT domains for end-to-end automation.
As companies move to digitize their business, they need an underlying network architecture, including automation, which supports business agility. This New IP architecture enables the network to become a platform for innovation and for developing, delivering and securing new applications. According to a global CIO survey1, 75 percent of respondents stated that the network is impacting their organizations' ability to achieve business goals. The lack of network automation and integration of the network with other IT operations and tool chains is the single biggest inhibitor to capitalizing on digitization.
Automation has been a long-standing hallmark of Brocade solutions, starting with storage networking in 1995. In 2009, Brocade extended its automation leadership with the industry's first Ethernet fabric comprised of Brocade® VDX switches featuring Brocade VCS® Fabric technology. Earlier this year, Brocade expanded its data center fabric portfolio with Brocade IP Fabrics, an open, standards-based design that leverages cloud-proven BGP-based architectures, with automation delivered by the new Brocade Workflow Composer. More recently, Brocade acquired StackStorm, an innovator in event-driven automation software, to help bring DevOps-style automation capabilities to the network. StackStorm technology is now a foundational element of Brocade Workflow Composer.
"Embarking on the digital transformation journey can be overwhelming for most organizations requiring changes to the network infrastructure, organizational and operational models and new skill sets. However, when broken down into digestible and evolutionary steps, organizations can navigate the journey at their own pace," said Jason Nolet, senior vice president, Switching, Routing and Analytics Products Group, Brocade. "One of the first places to start is to bring a new approach to network automation. With Brocade Workflow Composer, Brocade is bridging IT silos and enabling end-to-end automation of cross-functional IT workflows."
A Workflow-Centric Approach to Automation Increases Business Agility
To enable cross-domain automation, organizations must think in terms of workflows. Workflows have emerged as a fundamental part of IT operations within hyperscale cloud providers because they are proven mechanisms for converting business rules and policies into IT services delivered at scale. Since a workflow is a collection of tasks that are often executed manually and routinely, it serves as a strong foundation for developing automation.
Workflows can be single-domain, such as provisioning a network device, or cross-domain, such as detecting a network device issue and automatically creating and assigning a help desk ticket to a network operator. With cross-domain workflow automation, the manual steps of detecting an issue, identifying the potential cause, performing remediation actions and even creating a trouble ticket or paging a senior engineer can all be eliminated. As a result. IT can minimize human-induced errors, improve operational efficiency and greatly reduce time-to-resolution. According to ZK Research, human error accounts for 35 percent of network downtime. Network automation can reduce that downtime to zero.
"When I'm woken up to be notified of a problem, it's great to have an event-driven automation system that has already evaluated my alert and given me all the data I would have spent assessing by hand," said Benjamin Goldsbury, site reliability engineer at a social networking company. "If an automated workflow can reboot a non-responsive system to solve an issue, then what used to be a 2 a.m. wake-up call is now a 10 a.m. follow-up ticket."
Key Features of Brocade Workflow Composer
Unlike other network automation solutions that are often monolithic, proprietary and only address the network, Brocade Workflow Composer features:
- Software-driven lifecycle management. Brocade Workflow Composer automates the entire network lifecycle ranging from initial provisioning and validation to troubleshooting and auto-remediation.
- Cross-domain integration. Brocade Workflow Composer leverages customizable integration points to recognize events from any network device, cross-domain platform or application, and then invoke action by other tools and applications to execute an automated workflow. Brocade Workflow Composer provides more than 1,900 customizable integration points for popular platforms and applications such as Linux, Windows, vSphere, AWS, Azure, CloudFoundry, OpenStack, Docker, Kubernetes, CoreOS, FireEye, New Relic, Sensu, Splunk, ChatOps, PagerDuty and VictorOps.
- Flexible workflow automation for multivendor networks. Brocade Workflow Composer enables IT agility and choice with turnkey, customizable or do-it-yourself network workflow automation -- all supported in multivendor network environments.
- DevOps-inspired methodologies. Workflow execution is provided by the Brocade Workflow Composer's open, extensible, microservices-based framework. This framework leverages StackStorm, a variety of other popular, open source DevOps technologies, as well as a thriving community for peer collaboration and innovation.
"The Python library from Brocade Workflow Composer enabled us to decrease our development time from months to weeks, which empowered us to focus on delivering the highest levels of performance and availability to our customers," said Tim Harrison, product architect and technology advocate, Q9 Networks, Canada's leading provider of outsourced data center infrastructure, which received early access to Brocade Workflow Composer. "As we continue to optimize and deploy new cloud-based services to support our customers' enterprise cloud requirements, Q9 continues to leverage Brocade Workflow Composer to improve business agility through network automation."
Organizations that need help in transforming their network engineering and operations team can utilize Brocade NetDev Professional Services. Staffed with experienced network software developers, Brocade NetDev leverages solutions from Brocade and other vendors to help customers accelerate their automation journey.
Packaging and Availability
Acquired by Brocade in March 2016, StackStorm built a thriving open source project and community which Brocade will continue to support and contribute to under the StackStorm name. StackStorm cross-domain integrations are available today on GitHub.
Brocade Workflow Composer leverages StackStorm open source technology as well as other organic and open source technologies, while adding enterprise-class features and support. A trial version of Brocade Workflow Composer is available today. The product is currently scheduled to be released in the third quarter of 2016.
- Blog: Network Operators: Evolve or Get Left Behind
- ESG Report: Leveraging Network Automation for Greater IT Agility and Operational Efficiency
- Brocade Workflow Composer At-A-Glance
Brocade (NASDAQ: BRCD) networking solutions help the world's leading organizations turn their networks into platforms for business innovation. With solutions spanning public and private data centers to the network edge, Brocade is leading the industry in its transition to the New IP network infrastructures required for today's era of digital business. (www.brocade.com)
© 2016 Brocade Communications Systems, Inc. All Rights Reserved.
Brocade, Brocade Assurance, the B-wing symbol, ClearLink, DCX, Fabric OS, HyperEdge, ICX, MLX, MyBrocade, OpenScript, VCS, VDX, Vplane, and Vyatta are registered trademarks, and Fabric Vision is a trademark of Brocade Communications Systems, Inc., in the United States and/or in other countries. Other brands, products, or service names mentioned may be trademarks of others.
1 Global CIO Study 2015, Vanson Bourne, May 2015
MILPITAS, Calif. – ProphetStor Data Services, Inc. and Gigabyte Technology Co., Ltd. today announced that they have teamed up to showcase a cost-effective all-flash storage array based on Cavium's ThunderX® ARM processors as an alternative to the x86 architecture. This solution will be on display at GIGABYTE's suite on the 36th Floor of Taipei 101, until June 3.
Enabled by ProphetStor's intelligent, adaptive, and application-centric Software-Defined-Storage (SDS) technologies, the high-performance all-solid-state storage array is based on GIGABYTE's state-of-the-art R270-T61 server chassis, which takes full advantage of ThunderX's multiple built-in Ethernet ports to meet the demands of mission critical applications such as database management, virtualization, cloud computing, and big data analytics.
ProphetStor and GIGABYTE have entered a strategic partnership to establish an open ecosystem for cost-sensitive data centers and enterprises that require durable, yet economical, storage solutions that consume less power so they can simultaneously reduce both their CAPEX and OPEX.
"GIGABYTE and ProphetStor have previously collaborated on a cloud-in-a-rack project, which was well received by beta sites," said Alex Liu, Product Marketing Executive, Network & Communication Business Unit, GIGABYTE. "The overwhelming feedback we received from our key customers, however, is that now they need a more powerful storage solution that has a higher capacity and consumes much less power. I am happy to report that we were able to address both issues by working closely with ProphetStor, again, to create an all-flash array that delivers up to 150,000 IOPS, using energy-efficient ARM-based processors."
"As proud as we are of our storage software, ultimately, it is still limited by the hardware it runs on," said Eric Chen, ProphetStor CEO. "We teamed up with GIGABYTE so we can focus on developing and testing our software, knowing with high confidence that the underlying hardware will always provide the necessary foundation for us to maximize the performance and efficiency of each individual component. Companies want to buy solutions, and our partnership with GIGABYTE allows us to offer our joint customers storage arrays that they know would just work as they prescribed."
About GIGABYTE Technology
GIGABYTE is a leading brand in the global IT industry with employees and business channels in almost every country. Founded in 1986, GIGABYTE started as a research and development team and has since taken the lead in the world's motherboard and graphics card markets. Drawing from its vast R&D and manufacturing capacities and know-how, GIGABYTE had further expanded its product portfolio to include PC components, PC peripherals, laptops, desktop computers, network communication devices, servers and mobile phones, with a goal to serve each facet of the digital life in homes and offices. Everyday GIGABYTE aims to "Upgrade Your Life" with innovative technology, exceptional quality, and unmatched customer service. Visit b2b.gigabyte.com for more information.
About ProphetStor Data Services, Inc.
ProphetStor Data Services, Inc., a leader in Software-Defined Storage (SDS), provides federated storage and data services to enable both enterprises and cloud service providers to build an agile, automated, intelligent, and orchestrated storage infrastructure.
ProphetStor was founded in 2012 by seasoned storage experts with extensive experience in cloud computing platforms, software-based networked storage, data services, business continuity and disaster recovery.
Headquartered in Milpitas, California, ProphetStor has branch offices in Asia-Pacific regions to serve international customers. For more information, visit www.prophetstor.com.
ProphetStor Federator is a trademark of ProphetStor Data Services, Inc. in the US and other countries. All other company and product names contained herein may be trademarks of their respective holders.
Consolidation Expected to Create a New $26 Billion Pure-Play in Global IT Services
Move Also Unlocks Faster Growing, Higher-Margin and Stronger Free Cash Flow HPE
PALO ALTO, Calif. – Hewlett Packard Enterprise (NYSE: HPE)
- Transaction will deliver HPE shareholders approximately $8.5 billion in expected after-tax value in stock-for-stock exchange;
- Merger of two businesses expected to produce first-year cost synergies of approximately $1 billion post-close, with run rate of $1.5 billion by end of year one;
- HPE shareholders will own approximately 50 percent of new combined company;
- Agreements between HPE and the new company will maintain focus on serving current customers and growing new business opportunities over time;
- Mike Lawrie to become chairman, president and CEO of new company, Meg Whitman to join board; board will be split 50/50 between directors nominated by HPE and CSC; Mike Nefkens to join new company's executive team;
- One-time costs to separate Enterprise Services segment from HPE to be offset by lower costs associated with previously announced fiscal 2015 restructuring plan;
- HPE affirms fiscal 2016 non-GAAP diluted net earnings per share (EPS) outlook of $1.85 to $1.95 and updates fiscal 2016 GAAP diluted net EPS outlook to $1.68 to $1.78; and
- HPE to extend Q2 earnings call to elaborate on transaction; call to start at 4:30 p.m. ET today.
Hewlett Packard Enterprise (NYSE: HPE) today announced plans for a tax-free spin-off and merger of its Enterprise Services business with CSC (NYSE: CSC), which will create a pure-play, global IT services powerhouse. The spin-off and merger is the logical next step in the turnaround of HPE's Enterprise Services segment. It also allows a standalone HPE to further sharpen its leadership in building the vital end-to-end infrastructure solutions necessary to power the enterprise cloud and mobility revolutions.
Immediately following the transaction, currently targeted to be completed by March 31, 2017, HPE shareholders will own shares of both HPE and approximately 50 percent of the new company. The transaction is intended to be tax-free to HPE and CSC and their respective shareholders for federal income tax purposes.
"The 'spin-merger' of HPE's Enterprise Services unit with CSC is the right next step for HPE and our customers," said Meg Whitman, president and chief executive officer of Hewlett Packard Enterprise. "Enterprise Services' customers will benefit from a stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape."
"As a more powerful, versatile and independent global technology services business, this new company will be well positioned to help clients succeed on their digital transformation journeys," said Mike Lawrie, CSC chairman, president and chief executive officer. "Together, CSC and HPE's Enterprise Services will have the scale, foundation and next-generation technologies to innovate, compete and grow in a rapidly changing marketplace. We are excited by the great potential this merger brings to our people, clients, partners and investors, and by the opportunity to strengthen our relationship with Hewlett Packard Enterprise."
On a pro forma basis, the new company that combines CSC and HPE's Enterprise Services business is expected to have annual revenues of approximately $26 billion(1), more than 5,000 customers in 70 countries and employees in every major global region. Mike Lawrie, the current head of CSC, will become chairman, president and CEO of the new company, and Meg Whitman will join the Board of Directors. The new company's board will be split 50/50 between directors nominated by HPE and CSC. CSC's current CFO, Paul Saleh, will continue in that role in the new company after the transaction closes. Additionally, Mike Nefkens, the current EVP and GM of HPE's Enterprise Services business, will be a key part of the new company's executive team and partner closely with Lawrie on building the new organization. Other executives and directors of the merged company, as well as the name of the company, will be announced at a later date.
The transaction is expected to deliver approximately $8.5 billion to HPE's shareholders on an after-tax basis. This includes an equity stake in the newly combined company valued at more than $4.5 billion, which represents approximately 50 percent ownership, a cash dividend of $1.5 billion, and the assumption of $2.5 billion of debt and other liabilities. The merger of the two businesses is expected to produce first-year cost synergies of approximately $1 billion post-close, with a run rate of $1.5 billion by the end of year one. There is an opportunity for additional synergies in subsequent years. As owners of approximately 50 percent of the merged company, HPE shareholders will share in the value of the synergies, as well as future growth in earnings.
One-time costs to separate the Enterprise Services segment from HPE will be offset by lower costs associated with the fiscal 2015 restructuring plan; there are no incremental one-time cash payments beyond those already communicated. The transaction is subject to certain customary closing conditions.
Accelerating Focus in Two Businesses
The consolidation of CSC and HPE's Enterprise Services segment will create a new company with substantial scale to serve customers more efficiently and effectively worldwide. By combining, both organizations can more rapidly accelerate already-improved financial and operational performance. For customers, this enhances global access to world-class offerings in next-generation cloud, mobility, application development and modernization, business process services, big data and analytics, workplace, IT services, and security, combined with deep industry experience in sectors that include financial services, transportation, consumer products, healthcare, and insurance.
At the same time, the transaction should create significant incremental value for shareholders by unlocking the faster growing, higher margin and stronger free cash flow HPE. A standalone HPE, with $33 billion(2) in expected annual revenue, will sharpen its focus on secure, next-generation, software-defined infrastructure that leverages a world-class portfolio of servers, storage, networking, converged infrastructure, as well as its Helion Cloud platform and software assets. By bringing together leadership positions in these key data center technologies, HPE will help customers run their traditional IT better, while building a bridge to multi-cloud environments.
Beyond the data center, HPE is redefining IT at the edge with its next generation of Aruba and computing products for campus, branch, and IoT applications. In addition, through HPE's Technology Services division, the company applies the necessary consulting capabilities to help customers. HPE Financial Services offers customers financial flexibility to maximize their investments. And, HPE will continue to leverage its portfolio of operations, security, and big data software assets that deliver machine learning and deep analytics capabilities to customers.
Whitman continued, "As two standalone companies with global scale, strong balance sheets and focused innovation pipelines, both HPE and the new company that combines CSC and HPE's Enterprise Services segment will be well positioned as leaders in their respective markets. For HPE, our balance sheet, capital allocation strategy, and cost structure will now be fully optimized for a faster growing, higher margin and more robust free cash flow business. And, the new company will be in a stronger position to win than either organization could have been on its own."
Both the new company and HPE will be well-capitalized and have capital structures set to take advantage of their distinct growth opportunities and cash flow profiles. Each company will have its own equity currency, and investors will have the opportunity to invest in two companies with compelling and unique financial profiles well suited to their respective businesses.
Today's announcement builds on the progress HPE has made to turn around the Enterprise Services business and improve its operating model, labor mix and financial profile. In FY13, just three customers made up approximately 65 percent of HPE's Enterprise Services operating profit. Today, no single customer accounts for more than 10 percent. The company has significantly improved HPE's Enterprise Services cost structure by exiting high-cost data centers, improving low-cost location mix and rebalancing its workforce. Over the three-year period, HPE's Enterprise Services also has significantly improved service and response quality, leading to best in class net promoter scores from its customers.
As a result of customer diversification efforts and these other improvements, Enterprise Services delivered stable revenue for the first two quarters of fiscal 2016, which were the first quarters of year-over-year constant currency revenue growth since fiscal 2012. In the second quarter of fiscal 2016, Enterprise Services reported its eighth consecutive quarter of year-over-year operating margin expansion. Overall, HPE's Enterprise Services is on track to achieve its long-term goal of a market competitive cost structure and operating margins.
Goldman Sachs & Co. is serving as financial advisor to HPE on the transaction.
(1) Based on $18 billion in trailing four quarters of revenue for the Enterprise Services segment, adjusted for Mphasis and Communications and Media Solutions (CMS), plus $8 billion in trailing 4 quarters of revenue for CSC, adjusted for recent acquisitions.
(2) Based on trailing four quarter segment revenue for EG, SW and HPEFS; HPE revenue is total HPE revenue calculated on a trailing four quarter basis, including inter-company eliminations, less the Enterprise Services segment, excluding Commercial and Media Solutions (CMS).
For the fiscal 2016 third quarter, Hewlett Packard Enterprise estimates non-GAAP diluted net EPS to be in the range of $0.42 to $0.46 and GAAP diluted net EPS to be in the range of $1.10 to $1.14. Fiscal 2016 third quarter non-GAAP diluted net EPS estimates exclude an after-tax gain on the divestiture of H3C technologies and other of approximately $1.06, and after-tax costs of approximately $0.38 per share, related to restructuring charges, the amortization of intangible assets, separation costs and acquisition and other related charges.
For fiscal 2016, Hewlett Packard Enterprise estimates non-GAAP diluted net EPS to be in the range of $1.85 to $1.95 and GAAP diluted net EPS to be in the range of $1.68 to $1.78. Fiscal 2016 non-GAAP diluted net EPS estimates exclude an after-tax gain on the divestiture of H3C technologies and other of approximately $1.06, and after-tax costs of approximately $1.23 per share, related to restructuring charges, the amortization of intangible assets, separation costs, acquisition and other related charges and tax indemnification adjustments.
Investment Community Conference Call
HPE will extend its conference call to discuss its fiscal second quarter financial results today to elaborate on the transaction; the call will start at 4:30 p.m. ET. Mike Lawrie, CSC's chairman, president and CEO, will participate in the call to discuss this transaction along with HPE management. For webcast details, go to investors.hpe.com.
HPE is an industry-leading technology company that enables customers to go further, faster. With the industry's most comprehensive portfolio, spanning the cloud to the data center to workplace applications, our technology and services help customers around the world make IT more efficient, more productive and more secure.
CSC (NYSE: CSC) leads clients on their digital transformation journeys. The company provides innovative next-generation technology services and solutions that leverage deep industry expertise, global scale, technology independence and an extensive partner community. CSC serves leading commercial and international public sector organizations throughout the world. CSC is a Fortune 500 company and ranked among the best corporate citizens. For more information, visit the company's website at www.csc.com.
Forward Looking Statements
Information set forth in this communication, including statements as to Hewlett Packard Enterprise's outlook and financial estimates and statements as to the expected timing, completion and effects of the proposed merger between a wholly-owned subsidiary of CSC and Everett SpinCo, Inc. ("Enterprise Services") which will immediately follow the proposed spin-off of Enterprise Services from Hewlett Packard Enterprise, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These estimates and statements are subject to risks and uncertainties, and actual results might differ materially.
These statements are based on various assumptions and the current expectations of the management of Hewlett Packard Enterprise and CSC, and may not be accurate because of risks and uncertainties surrounding these assumptions and expectations. Factors listed below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on the operations or financial condition of Hewlett Packard Enterprise or CSC. Forward-looking statements included herein are made as of the date hereof, and Hewlett Packard Enterprise and CSC undertake no obligation to publicly update or revise any forward-looking statement unless required to do so by the federal securities laws.
Some forward-looking statements discuss Hewlett Packard Enterprise's and CSC's plans, strategies and intentions. They use words such as "expects," "may," "will," "believes," "should," "would," "could," "approximately," "anticipates," "estimates," "targets," "intends," "likely," "projects," "positioned," "strategy," "future," and "plans." In addition, these words may use the positive or negative or other variations of those terms. Forward-looking statements in this press release include, but are not limited to, statements regarding the expected effects on Hewlett Packard Enterprise, Enterprise Services and CSC of the proposed distribution of Enterprise Services to Hewlett Packard Enterprise's stockholders and merger of Enterprise Services with a subsidiary of CSC (the "Transaction"), the anticipated timing and benefits of the Transaction, including future financial and operating results, and whether the Transaction will be tax-free for Hewlett Packard Enterprise and its stockholders for U.S. federal income tax purposes, the combined company's plans, objectives, expectations and intentions. Forward-looking statements also include all other statements in this press release that are not historical facts.
These statements are based on the current expectations of the management of Hewlett Packard Enterprise and CSC (as the case may be) and are subject to uncertainty and to changes in circumstances. Major risks, uncertainties and assumptions include, but are not limited to: the satisfaction of the conditions to the Transaction and other risks related to the completion of the Transaction and actions related thereto; Hewlett Packard Enterprise's and CSC's ability to complete the Transaction on the anticipated terms and schedule, including the ability to obtain shareholder and regulatory approvals and the anticipated tax treatment of the Transaction and related transactions; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; CSC's ability to integrate Enterprise Services successfully after the closing of the Transaction and to achieve anticipated synergies; the risk that disruptions from the Transaction will harm Hewlett Packard Enterprise's or CSC's businesses; the effect of economic, competitive, legal, governmental and technological factors and other factors described under "Risk Factors" in each of Hewlett Packard Enterprise's and CSC's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties.
Use of non-GAAP financial information
To supplement HPE's historical and forecasted financial results presented on a GAAP basis, HPE provides non-GAAP diluted net earnings per share. Non-GAAP diluted net earnings per share is defined to exclude the effects of any restructuring charges, charges relating to the amortization of intangible assets, separation costs, acquisition and other related charges and tax indemnification adjustments recorded or expected to be recorded during the relevant period. In addition, non-GAAP diluted net earnings per share are adjusted by the amount of additional taxes or tax benefit associated with each non-GAAP item. Fiscal 2016 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $1.10 per share, related primarily to restructuring charges, the amortization of intangible assets, separation costs, acquisition and other related charges and tax indemnification adjustments.
HPE's management uses non-GAAP financial measures, including HPE's non-GAAP diluted net earnings per share, to evaluate and forecast HPE's performance before gains, losses or other charges that are considered by HPE's management to be outside of HPE's core business segment operating results. These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HPE's results as reported under GAAP. For example, items such as the amortization of intangible assets, though not directly affecting HPE's cash position, represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in HPE's non-GAAP diluted net earnings per share and therefore does not reflect the full economic effect of the loss in value of those intangible assets. In addition, items such as restructuring charges that are excluded from HPE's non-GAAP diluted net earnings per share can have a material impact on HPE's GAAP diluted net earnings per share. Other companies may calculate non-GAAP diluted net earnings per share differently than HPE does, which limits the usefulness of that measure for comparative purposes.
Compensation for limitations associated with use of non-GAAP financial measures
HPE compensates for the limitations on its use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. HPE also provides reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure within this news release and in other written materials available at www.hpe.com/investor that include these non-GAAP financial measures, and HPE encourages investors to review carefully those reconciliations.
Usefulness of non-GAAP financial measures to investors
HPE believes that providing non-GAAP financial measures to investors in addition to the related GAAP financial measures provides investors with greater transparency to the information used by HPE's management in its financial and operational decision making and allows investors to see HPE's results "through the eyes" of management. HPE further believes that providing this information better enables HPE's investors to understand HPE's operating performance and to evaluate the efficacy of the methodology and information used by HPE's management to evaluate and measure such performance. Disclosure of non-GAAP financial measures also facilitates comparisons of HPE's operating performance with the performance of other companies in HPE's industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.
© 2016 Hewlett Packard Enterprise, L.P. The information contained herein is subject to change without notice. Hewlett Packard Enterprise shall not be liable for technical or editorial errors or omissions contained herein.
Additional Information and Where to Find It
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. In connection with the proposed Transaction, CSC will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4, which will include a prospectus. CSC will also file a proxy statement which will be sent to the CSC shareholders in connection with their vote required in connection with the Transaction. In addition, Enterprise Services expects to file a registration statement in connection with its separation from Hewlett Packard Enterprise. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENTS/PROSPECTUSES AND PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CSC, ENTERPRISE SERVICES AND THE TRANSACTION. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge from the SEC's website, www.sec.gov. These documents (when they are available) can also be obtained free of charge from the respective companies by directing a written request to Hewlett Packard Enterprise at Hewlett Packard Enterprise Company, 3000 Hanover Street, Palo Alto, California 94304, Attention: Investor Relations, or by calling (650) 857-2246.