HP, Hewlett Packard Enterprise Go Separate Ways

The long-awaited split of HP’s personal computer and enterprise operations has taken place, and CEO Meg Whitman, who oversaw the transition of the massive, listing ship, clearly faces the most challenging crisis of her career — trying to save a legacy business from being buried by the sands of time and progress.

HP, which struggled for more than 15 years to compete in a modern age of mobile computing and cloud services, on Monday began its first official business day as a house divided into two brand new US$50 billion enterprises.

Whitman is now president and chief executive of Hewlett Packard Enterprise, which offers cloud services and data center infrastructure to the HP corporate customer base.

Despite having served just three years at HP, Dion Weisler, who was executive vice president of the company’s printer and personal systems unit, has been named chief executive of the new HP, which will focus on those core businesses.

The split is another symbol of the company’s failure to adapt to the rapid changes taking place in the increasingly cloud- and mobile-dominated technology industry, suggested Rob Enderle, principal analyst of the Enderle Group.

The failure to react to those changes resulted a disastrous series of failed acquisitions, only to be followed by a rescue deal involving a new dance partner that failed to materialize, he told the E-Commerce Times.

“They were trying to package the company to be bought by EMC,” Enderle said. “They instead opened the door for Dell to buy EMC, creating perhaps the biggest failure since Meg Whitman took over HP. In terms of catastrophic outcomes, this overshadows even the Palm and Autonomy moves.”

New Opportunities

The move will streamline management of HP’s printer and personal computer business and help it adjust to the rapid changes taking place in the personal computing space, observed Ryan Reith, program director of mobile device trackers at IDC. However, HP may have acted too late.

“I think this will certainly help the company become more nimble and [give it] flexibility to pivot as needed,” he told the

E-Commerce Times. “The challenge is that a lot of the HP business has needed to move — mainly into mobile — a few years back. So despite these efforts, they are still playing catch-up in some aspects of today’s computing world.”

Shifting its personal computer business away from standalone desktops and laptops and toward detachable tablets and 2-in-1 hybrid models is a good strategy, Reith noted.

“They will continue to do battle with the same guys [as] in the PC space — including Dell, Lenovo and Apple,” he said.

However, “with Microsoft seeming to double down on its hardware investment with the updates to Surface and now Surface Book, if I were a PC OEM, I would be questioning what the longer-term strategy is,” added Reith.

The enterprise business strategy will allow the company to provide customized solutions for its various business partners, Whitman said at an analysts’ meeting last month.

“We all live in a hybrid world with applications across a blend of public and private cloud, as well as traditional IT, and that’s why infrastructure isn’t one size fits all anymore,” she remarked. “It isn’t just in the data center. It isn’t just in the cloud. Infrastructure has to be everywhere at the right cost, with the right management at the right scale.”

Transition Period

Both Hewlett Packard Enterprise and HP will have to go through a period of difficulty as each new company works to position itself to compete in a new competitive environment.

At the end of the day, a streamlined pair of HP companies will have better resources to face challenges head on, said Jeff Kaplan, managing director of THINKstrategies.

“Both companies are going to face organizational issues, including restructuring their operations and reorienting their go-to-market strategies and tactics,” he told the E-Commerce Times.

“Until they resolve these internal challenges, they will lose momentum in the marketplace,” Kaplan cautioned. “Their ability to overcome these challenges will determine if they are able to resurrect their competitive positions in their respective market segments and preserve Meg Whitman’s legacy as a bold leader.”

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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