The decision by HP to split itself into two companies has the whiff of desperation about it.
One wing will sell printer ink and PCs, while the other will position itself selling into the enterprises with services and hardware.
Meg Whitman said that the move is intended to give both wings flexibility in the different marketplaces they represent but the end result is more likely to be confusion than clarity.
And it is worth contrasting Hewlett Packard with Dell. The latter has managed to re-engineer its entire business over the last five years and be successful in selling into services, into software and for the PCs that have brought it smelling of success. It uses its different services and products to leverage its sales. And it doesn’t panic, Captain Whitman.
The devil is in the HP detail.
The newly spring Hewlett-Packard Enterprise and HP Inc could well end up competing with each other but that isn’t the least of their problems. The move will mean a big shift in its relationship with its partners – some of which sell the entire range of HP kit and services through distribution. Those details will take quite some disentangling.
HP is in the fourth year of its five year plan but this looks a bit of its plan that wasn’t originally part of its five year plan.
Whitman said that by moving one HP to two HPs it will be in a better position to compete, support its customers and partners and also bring in extra cash for its shareholders. That’s what she hopes.
HP one and HP two hope to complete the separation by the end of its financial year 2015. Whitman will serve on the boards of HP one and HP two. That will be jolly interesting when the two companies finally get their infrastructure act together.
The official release doesn’t say how HP one and HP two will share their technology, and employees – who have since big restructures over the last three years – just exactly feel about all or any of this.
Wall Street seems to like it – HP’s share price rose as the news was confirmed yesterday.
