HP Gets Official Nod on Split into Two Companies

ItEUs official. Hewlett-PackardEUs board of directors has approved the separation of HP into two completely separate companies. Hewlett Packard Enterprise Co. and HP Inc. will begin operating on November 1, when the separation is expected to be fully completed.

The names are similar but the missions are different. As its name suggests, Hewlett Packard Enterprise will offer technology solutions aimed at helping enterprises optimize IT and build cloud and mobile solutions. This new brand will fold in HPEUs enterprise group, enterprise services, software and financial services businesses.

The new HP will target the consumer end of the business, operating HP's printing and personal systems businesses. HP will focus on new innovations like multi-function printing, Ink in the Office, graphics, commercial mobility, and services.

"This separation will enable us to accelerate the turnaround we began four years ago," said Meg Whitman [pictured], chairman, president and CEO of HP. "As two independent, industry-leading companies, Hewlett Packard Enterprise and HP Inc. can drive more focused business strategies, innovation roadmaps, and go-to-market models. The separation will also present better choices for investors by creating two distinct and attractive investment profiles."

HPEUs String of Bad Moves

We caught up with Rob Enderle, principal analyst at the Enderle Group, to get his thoughts on the split. He told us the industry is in a consolidation phase. That suggests HP should be acquiring companies not splitting, especially considering reports indicating that the PC market is strengthening, he said.

WhatEUs more, the industry recently witnessed how IBMEUs spin out of its PC unit caused the costs for the company's x86 servers to increase dramatically due to dramatically lower volume discounts for parts -- and IBM then had to sell those off as well, Enderle said. HP doesnEUt really have a fall back if it loses x86 servers, he said.

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