HP last month reported fourth quarter of US$33.6 billion, a 19% year-over-year increase, or 16% after adjusting for currency fluctuations. Forrester Research analyst Andrew Bartels credits HP with expanding and deepening its market presence in both services and software.

"In that sense, it's kind of following the path that IBM has blazed of moving out of hardware, which is under more price pressure," Bartels says.

Secondly, Bartels says HP has done well in the consumer market with personal , and this has helped the company ride out some disappointing earnings in its servers and storage business.

Despite 13% growth in storage revenue, the overall storage and server division reported total fourth quarter revenue of $5.1 billion, down 1% from the previous year. While faring well in the blade server market, HP has struggled with sales of industry standard and business critical servers, following a trend which recently saw the worldwide server market post its largest since 2002. (Compare )  Moves toward and are harming server sales throughout the market, Bartels notes.

HP itself predicts great financial challenges in 2009.  The company says unfavorable currency exchange rates will likely drag down its fiscal 2009 revenue by five percentage points in its first quarter and six to seven percentage points over the year. The U.S. dollar has gained strength as of late against currencies such as the euro and British pound. More than two-thirds of HP's fourth quarter revenue came from outside the United States.