HP is reportedly splitting into two companies

[Arthur]

HPs shareholders should have listened to Léo back in 2011.

 

Sources: Ars Technica, Re/Code, WSJ

 

The Wall Street Journal is reporting that HP will break up into two separate companies. According to the report, the company appears ready to split into separate "Consumer" and "Enterprise" companies, with PCs and printers ending up in one company and corporate hardware and services operations going to the other. The Journal says HP plans to announce the move "as early as Monday."

 

If this sounds familiar, it's because this is basically the plan that was proposed in 2011 when HP's CEO was Léo Apotheker. HP intended to get rid of the "Personal Systems Group" (PSG), the division that makes PCs, and focus on the enterprise. Shareholders didn't like the plan though. So after Apotheker was fired and the current CEO Meg Whitman took over, she decided to keep the PC division. At the time, Whitman said, “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. HP is committed to PSG, and together we are stronger.” Whiteman reorganized the unit, combining the low-profit PC division with the more profitable printer group.

 

After a few years, it looks like the old plan is mostly back, and the PC group will be spun off into a separate company and take the printer group with it. WSJ says Whiteman will be the chairman of Consumer HP and CEO of Enterprise HP. The current lead independent director, Patricia Russo, will be chairman of Enterprise HP, and Dion Weisler will move from an executive in the PC/printer group to become the new company's CEO.

 

In a process led by Morgan Stanley, HP approached both Lenovo and Dell about the possible sale of its $32 billion (2013 sales) PC operation. In both cases it was rebuffed.

 

In another case, HP approached two India-based companies, Wipro and Infosys about the possible sale of its $28 billion IT services unit, known as Enterprise Services. Again it was rebuffed.

 

In a third case, it approached IBM about the sales of its $1.2 billion Business Critical Server business, but was turned down.

 

HP also recently explored a strategic merger with data storage company EMC that would have created a $130 billion technology giant. In contemplating that proposed merger, HP was interested most in VMware, the cloud software company which EMC controls.

 

The merger talks failed mainly because EMC wanted a higher valuation than HP was willing to pay. One other reason the talks may have failed was that HP and EMC viewed the declining PC and printer divisions as a drag on the combined operations, sources say. A split into two companies might set up a scenario down the road where HP and EMC re-open those merger talks combining the enterprise company with EMC.

[rich_tech]

I would settle for a better website than 2 companies here, machines are decent enough, but the website is horrible when you need to download something.

[Arthur]

I would settle for a better website than 2 companies here

Too right. If they had a better website I reckon they would sell more PCs! I hate using it.

[hardtailstar]

I would settle for a better website than 2 companies here, machines are decent enough, but the website is horrible when you need to download something.

 

exactly that!

[IrritableTech]

I predict they will name the two companies 'H' and 'P'.

 

P will sell all the Printers, Personal Computers etc.

H will sell all the H'infrastructure kit.

 

Head office of H will be moved to West Yorkshire to help with product association and branding.

[spacebar]

I wonder if they will ever drop making PC's completely.

[pete]

Too right. If they had a better website I reckon they would sell more PCs! I hate using it.

 

That's mostly down to their internal IT being idiots: Daring Fireball Linked List: Follow-Up on HP's 'License Plate Domain' URLs

[Arthur]

That's mostly down to their internal IT being idiots

I completely agree.

[Arthur]

I predict they will name the two companies 'H' and 'P'.

The name HP have chosen for their new PC and printer company is pretty clever.

 

www.nasdaq.com/press-release/hp-to-separate-into-two-new-industryleading-public-companies-20141006-00109

 

HP today announced plans to separate into two new publicly traded Fortune 50 companies: one comprising HP's market-leading enterprise technology infrastructure, software and services businesses, which will do business as Hewlett-Packard Enterprise, and one that will comprise HP's market-leading personal systems and printing businesses, which will do business as HP Inc. and retain the current logo.

[localzuk]

Interesting move. It might stop their consumer junk interfering with their enterprise stuff! Although, sadly they don't classify their business/enterprise PCs as being part of the enterprise division...

 

So what will happen in reality is there will likely be a sharp shift to consumer products in the PC division, as everything is about consumers now it seems!

[Arthur]

55,000 jobs to go as well.

 

HP confirms breakup, layoffs hit an entire Google’s worth of employees « Ars Technica

 

[localzuk]

That isn't a new thing, they're just adding a few thousand more to the cuts already planned and in place.

[Latham]

I predict they will name the two companies 'H' and 'P'.

 

P will sell all the Printers, Personal Computers etc.

H will sell all the H'infrastructure kit.

 

Head office of H will be moved to West Yorkshire to help with product association and branding.

"Ey up, 'eard you needed 'elp with t'servers."

[TotalDan]

I wonder if they will ever drop making PC's completely.

 

I wouldnt be surprised if this is the first move to sell of the PC / printer division