Is There Interest in the PC Business?
It's unclear how that environment will impact HP as it looks at options for spinning off the PC business. Some analysts have pegged the business at about $12 billion. Lenovo and Samsung have been mentioned as potential buyers. Whoever buys it will get a business that saw commercial revenue in the quarter jump 9 percent, while consumer revenue fell 17 percent. "When IBM chose to [sell off its PC business], there was a high degree of interest," Gartner's Margevicius said. "Now what's the interest?"Since then, IBM has only grown the business. In its second-quarter, IBM saw its software business revenue grow 17 percent, to $6.2 billion. By contrast, HP had software revenues of $780 million, a 20 percent jump. "HP had already adopted much of IBM's services-based hypothesis, now with its proposed spin out of the PC industry," Gartner analyst Mark McDonald said in an Aug. 18 blog post. "HP is going full bore on the commercial services market hypothesis, seeking to buy Autonomy and shedding its [webOS-based] tablet offering." In Apotheker, HP now has a CEO with a deep background in enterprise software, given his previous position heading up software giant SAP. That will make a difference, according to Rob Enderle, principal analyst with The Enderle Group. Selling the PC unit to Lenovo worked out "incredibly well for IBM and Lenovo," Enderle said in an email to eWEEK. "The best practice that HP is following is modeling the company around the skills of the CEO, which has worked very well for Apple and IBM. So, given IBM and Apple examples, this should result in a vastly stronger HP. However, like it did with Lenovo, it likely will take the spun-out company 18 to 36 months to hit its stride." Not everyone is looking to get out of the worldwide PC market, which will still see 385 million units sold this year, according to Gartner. But it takes a particular kind of vendor-one that can live with the low profit margins and differentiate itself to some extent from its competitors-that will survive, Margevicius said. "The PC business is still a good business for a lot of companies," he said. One of those companies is Lenovo. In its most recent quarter, Lenovo saw PC shipments grow 23 percent, with the company's overall revenues jumping 15 percent and profits rising 51 percent. However, few if any at IBM appear to be looking back in regret at the sale of its PC business to Lenovo. Mark Dean was one of a dozen engineers who help create the first IBM Personal Computer. Marking the 30th anniversary of that event, Dean said he was proud to be part of that group. "It may be odd for me to say this, but I'm also proud IBM decided to leave the personal computer business in 2005, selling our PC division to Lenovo," Dean, now the CTO of IBM's Middle East and Africa group, wrote in an Aug. 10 posting on IBM's Smarter Planet blog. "While many in the tech industry questioned IBM's decision to exit the business at the time, it's now clear that our company was in the vanguard of the post-PC era."
IBM also had been building up its other businesses-particularly software-for years before selling off its PC business, dating back to 2000. Big Blue has continued that push, particularly in the field of analytics. At the time that it sold its PC business to Lenovo, it had the second largest software business, behind only Microsoft, according to the Wall Street Journal.