The writing was already on the wall. But today HP officially announced plans to split into two companies. One will be HP Inc., including the company’s PCs, printers and other personal devices. The other will be Hewlett-Packard Enterprise, including technology infrastructure, software and services. (This would obviously include the company’s cloud computing services.)
The announcement follows some major changes at HP in both the PC and cloud computing divisions which will soon be part of two separate companies. This summer HP announced release for a new line of inexpensive PCs and tablets under the collective name Stream. In September, the company revealed plans to acquire Eucalyptus Systems. The company makes open source business cloud software.
The announcement follows an announcement last week that eBay plans to spin off PayPal into a separate company. Both moves could ultimately be good for small businesses depending on a few factors.
HP Focuses on Budget PCs
In August, HP unveiled the Stream 14. The device could be the first in a line of new computers and tablets that attempt to deliver business computing on a budget. The Stream series of devices will reportedly deliver a low cost computing experience similar the Chromebook.
But importantly, HP is addressing the preference among business users for a Windows device by running a version of Windows on the laptop, which also boasts (as its name suggests) a 14 inch display.
Originally announced as starting at $199, it turns out that the HP Stream 14 will more likely start at $300, Engadget reports. But less expensive laptops and a tablet for as little as $99 may be coming soon.
HP Cloud Services Will Likely be Reimagined
HP’s acquisition of Eucalyptus Systems, estimated at around $100 million, is more of an acquihire. The goal is to make Eucalyptus CEO Marten Mickos into HP’s Senior Vice President and general manager of HP’s Cloud business. Though this will now likely be part of the new Hewlett-Packard Enterprise.
That will put Mickos in charge of developing HP’s Helion business cloud services. Built originally for larger enterprises, Helion now offers solutions for businesses of all sizes, HP says.
With Google reconfiguring its cloud services, Dropbox and Amazon making changes and even Apple cutting its cloud service costs, it’s reasonable to expect the new Hewlett-Packard Enterprise to follow suit.
Better Products and Services for Businesses?
As in the case with eBay and PayPal, both new divisions of HP believe they can focus exclusively on their individual niches free of larger competing priorities.
For businesses of all sizes this could mean better more competitive PCs and other business devices but also better, more competitive cloud and other business services.
HP President and Chief Executive Officer Meg Whitman will serve as President and CEO of the new Hewlett-Packard Enterprise.
Meanwhile, Executive Vice President of HP’s Printing and Personal Systems, Dion Weisler will head up the new HP Inc. as president and CEO. Whitman will also serve as non-executive Chairman of the Board on HP Inc’ Board of Directors. The split of the company is expected to be completed by the end of fiscal year 2015.
This reminds me of the eBay/PayPal split. I wonder if this is about to become a trend with companies. First, what seemed to me like lots of companies making acquisitions, and now splits. Hmm.
Wow, huge move! It makes me wonder if Microsoft would ever go this route.
I won’t be surprised if Microsoft’s considered it in the past. I reckon if they face really fierce competition, or their competitors start splitting companies and become even more competitive, Microsoft might very well do the same thing.
It really needs to focus on a specialized market. With so many brands to choose from, you really cannot just focus on the need for your product, you have to craft a culture that is associated with your product. That’s the only way to sell more units.