NEWS ANALYSIS: Nov. 2 was the first official business day of the newly divided Hewlett-Packard Co., and at least at the outset, employees are enthusiastic.
SUNNYVALE, Calif.—If one simply drops an "o" into HPE (Hewlett-Packard Enterprise) in the appropriate place, it spells a word that is particularly fitting for the employees at the struggling corporation. They believe the esteemed elder statesman of an IT company has turned a corner onto the right street.
Nov. 2 was the first official business day of the newly divided Hewlett-Packard Co., with the Silicon Valley-headquartered enterprise portion, HPE, moving on to handle all software, server, storage and accompanying services business. HP Inc. is taking care of the PC and printer businesses. Both companies bring in yearly revenue of roughly $55 billion.
has chronicled the peaking and recession of the old HP very closely over the past 15 years; simply go to the search bar at the upper right corner of this page and have at it. Here's a start: One of our valued contributing writers, Don Reisinger, filed a slideshow a year ago in eWEEK
that explains "Ten Big Problems That Brought HP to a Decision to Split Up."
Check it out.
A lot has happened in the last four years since CEO Meg Whitman was brought in from the board of directors following an unsuccessful run for governor of California in 2010 to steady a listing ship that had bumbled through a decade of bad high-level decision making. Everything that has taken place points directly to the decision made a year ago to break up the company so that each half could focus on different markets and function in a more efficient manner.
HP Might Have Broken Up Four Years Ago
As Reisinger reminded us in his article, this isn't the first time HP has considered cutting loose its PC business. CEO Leo Apotheker (2010-2011) came up with the idea before his ouster, which was one of the main reasons he quickly lost his job. Apotheker might have had the right idea, but he didn't know how to get board and market buy-in.
When Whitman came in, she said she wouldn't spin off the PC business. Now she has; subsequent circumstances dictated the move. Once again, all of this movement calls into question whether HP's management can find a successful turnaround strategy; that has yet to play out. The company is still profitable, but it's treading revenue water, and that may be changing one way or another following the breakup.
After talking to a group of HPE managers, eWEEK
determined that the breakup is analogous to how new-gen IT works. New-gen IT uses leaner code, has fewer people involved to mess it up, better architecture and more efficient distribution. Along those lines, HPE has fewer people, clearer lines of communication and a cleaner "architecture"—meaning overall—strategy, at least according to the folks to whom we talked.
HPE and HP Inc. will continue to interact, of course, but only on the highest management levels. They have different markets to serve—consumer versus enterprise—so off they go.
For the record, while Whitman runs HPE, Dion Weisler, former executive vice president of HP's Printing and Personal Systems business, heads HP Inc. as president and CEO. Whitman serves as non-executive chairman of HP Inc.'s board of directors, so there's some direct high-level cross-management.
Key Managers Say They Are Recharged
Ask key managers at HPE about how the process has taken shape and whether they are recharged as the two companies move in their own separate markets, and the answers across the board return as genuinely positive.
"We've been interacting in the new way for months, so Monday (Nov. 2) isn't going to seem very different to us at all," Roy Ritthaler, HPE's new vice president of Product Marketing for IT operations management, told eWEEK
during the informal gathering of HPE software team leaders on Oct. 29.