Hewlett-Packard, one of the pillars of the Silicon Valley computer industry, will split into two parts; separating its personal computer and printer businesses from its enterprise technology services.
It’s no secret that HP has been dealing with a multi-year restructuring plan, but on Monday we learned that the tech services division will be named Hewlett-Packard Enterprise while the PC and printer business will be known as HP Inc.
HP’s current CEO Meg Whitman will lead HP Enterprise, and Dion Weisler, who is already in charge of the HP PC and printer business, will become the CEO of HP Inc. The breakup has been in the works for more than a year, and is part of an effort to keep shareholders happy. Think of HP’s split in the same way that eBay recently turned PayPal into its own company.
“[The breakup] will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders,” Whitman said in a statement.
In short, this means that the new HP Inc. will have a singular focus on building great PCs and printers for consumers while Hewlett-Packard Enterprise can focus on data centers and cloud solutions for businesses. It should be a win-win for consumers and businesses who want the best products and services from HP … and makes HP more attractive to shareholders who want to invest in one part of the business but not the other.
Prior to the split, HP cut costs and laid off tens of thousands of employees. In August, HP reported year-over-year revenue growth of just 1% to $27.6 billion while HP’s Personal Systems Group (the PC business) grew 12% during the last year.
The bottom line is that HP notebooks, tablets, and desktops aren’t going away anytime soon, if ever … which is good news as we get closer to the holiday shopping season. In truth, the new HP Inc. may simply be returning to its roots. HP was founded 75 years ago in a garage in Palo Alto, California, where it focused on providing tech to the motion picture industry before expanding into the PC industry.
While HP Inc. isn’t moving back to a tiny garage, it will be more focused on PCs and printers without the distractions of data centers and cloud solutions.