HP Splits into Two Companies

Oct 07, 2014

Enterprise giant frees itself from ink and home PCs (and visa versa).

HP CEO Meg Whitman has confirmed the rumor that the company is planning on splitting into two different companies. According to the announcement, the server, storage, software, and corporate services division will split into a separate company known as HP Enterprise. The PC and printer division, which will primarily server the consumer sector, will also fend for itself and retain the name HP Inc. Whitman herself will stay on as CEO of HP Enterprise, and the current PC and printer exec Dion Weisler will become the CEO of HP Inc.
The announcement is especially surprising (or some might say ironic?) considering the row that started when former CEO Leo Apotheker announced plans to spin off the PC and Printer business three years ago. At the time, the outrage resulting from the announcement of a split caused a board room coup that eventually brought Whitman to power.
Still, Whitman claims that her complete change in viewpoint results from real considerations. She says the company has “… considerably strengthened our core businesses to the point where we can more aggressively go after the opportunities created by rapidly changing market.” What she didn't say is that the PC market has deteriorated significantly since the last time, and HP knows it needs a bigger piece of the tablet and mobile business to survive in the consumer space. Another phenomenon coming into the foreground is 3D printing. The company knows it needs a piece of the 3D printing action if it is going to prolong its reign as the king of printers.
It is also possible the board and shareholders like this deal better than the last one – Apotheker was talking about selling the PC and printer division – Whitman has apparently worked out an arrangement where the company will split like an amoeba, with current shareholders owning shares in both companies and both sides retaining their independence.
Apotheker’s reflections on the plan are not known at this time. It would not be surprising if he feels a sense of vindication for knowing the company was getting too big and ungainly to react to the changing market. Part of his problem was that he shocked everybody and they freaked out; but still, politics is part of the job description of any corporate CEO, and in that sense, the present proposal looks a lot better to the world than Apotheker’s unexpected fire sale.  

Related content

  • News

    Updates on Technologies, Trends, and Tools

  • Welcome

    HP CEO Meg Whitman just announced that HP employees will no longer be able to telecommute because the company will need “all hands on deck” at the corporate offices. Few details emerged on who these telecommuters were or what they were doing from their homes. The announcement was strangely similar to another by Yahoo CEO Marissa Mayer a couple months ago. In both cases, the argument was that colocation would lead to increased productivity through teamwork and enhanced collaboration.

  • Welcome

    One of the more interesting news items that crossed my desk – or my desktop, as in Mate, since loose papers don't really fly through my office like they used to, was a quote from Hewlett-Packard Enterprise's CEO Meg Whitman, "AI and robots? Will someone think of the jobs?"

  • Welcome

    A closed-source code base is a huge, ever-fading inertial mass. When it begins, with those first exhilarating lines, or even up through the first few releases, you can truly say that you are writing it. But after a while, it is more like you are tending it – or feeding it. It becomes an investment, an asset, a castle you are protecting, which means all your strategies are defensive and your dreams will not stray far from your spot of holy ground.

  • Motorola Plans Split into Consumer and Business Companies

    Motorola has announced a planned split by its first quarter 2011. The mobile handset and set-top box sector will be a separate publicly traded company from the enterprise solutions and networking business.

comments powered by Disqus
Subscribe to our Linux Newsletters
Find Linux and Open Source Jobs
Subscribe to our ADMIN Newsletters

Support Our Work

Linux Magazine content is made possible with support from readers like you. Please consider contributing when you’ve found an article to be beneficial.

Learn More