Goodbye old HP, hello new HPs - but for how long?

On Monday 2nd November, HP as we know it ceases to exist. The IT supplier that once was too big to fail, becomes two companies that, if recent history is anything to go by, will be individually much more vulnerable.

Of course the rationale for the move is quite the opposite – two slimmer, more focused firms; one targeting enterprises, one more oriented to consumers. The logic there is spot on – it’s increasingly difficult for a major IT supplier to satisfy the needs of both companies and consumers using the same business model and investment priorities. The R&D behind a tablet device is completely different to that for cloud, servers or storage, for example.

But HP’s split doesn’t come at a time when it offers a great deal of confidence to market watchers that the underlying strategy is going in the right direction.

Hewlett Packard Enterprise – the new corporate IT supplier – is cutting a further 30,000 jobs, in addition to the 55,000 lost across HP in recent years. No firm making cuts on that scale simply to maintain profitability can afford to invest in the next generation technology it needs to remain competitive.

The company’s cloud strategy continues to lurch one way then the next like an inebriated sales rep. Six months ago, HP denied stories that it was about to exit the public cloud market – only to confirm its exit from the market in October.

Meanwhile HP Ink – sorry, Inc – the PC and printer company, faces a future in a rapidly declining PC market, without any significant presence in tablets or mobiles, eking out a profit from sales of ink even as people increasingly print less. Where, seriously, is the long-term growth in those markets?

The old HP’s current market worth is about $49bn – less than Apple’s latest quarterly revenue or its annual profit. HP still has a lot of good people, some good products and valuable intellectual property. How long before someone looks at one of the two halves of the former whole and thinks that’s a bargain?

As Dell and EMC are demonstrating, even the biggest dinosaurs are quite capable of embracing each other for comfort as the asteroid descends. For the sake of HP’s many corporate customers, let’s hope the split is the kick it needs, not another bump on the way down.

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close