HPE Reveals Details for Spin-off of Its Software Business

HPE announced that its 50.1 percent portion of the Micro Focus software business will be spun off into yet a new entity called Seattle SpinCo, Inc., at the close of business on Aug. 21.

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The former Hewlett-Packard Co., known for generations as simply HP, has been reconfiguring itself so often during the past few years that it sometimes takes a few minutes to remember what acronyms and corporate functions have gone where.

  • Fifteen years ago, HP bought Compaq computer’s PC business, floated the idea of spinning it off in 2011 and then thought better of it.
  • In 2011, HP bought U.K. software firm Autonomy for $11 billion so it could start a new analytics product and service line. It abandoned that idea, took an $8 billion charge for the mistake and has regretted the move ever since.
  • In November 2015, the venerable IT giant--which turns 70 on Aug. 18--split into HP Enterprise (enterprise hardware, software and services) and HP Inc. (consumer PCs, printers and other devices) in a massive changeover impacting 250,000 employees. The decision to separate the company was made to simplify HP’s complex business structure and allow each newly formed company to “concentrate its financial resources solely on its own operations,” the company said at the time.

Apparently there’s even more simplicity in the offing. On Aug. 4, HPE announced that its 50.1 percent portion of the Micro Focus software business will be spun off into yet a new entity called Seattle SpinCo, Inc., at the close of business on Aug. 21. The resulting company will operate as a wholly-owned subsidiary of Micro Focus, but HPE will still have a relationship with the company and likely will license some of its IP.

Whew. Got all of that straight? You can always go back and re-read it.

For its stockholders, HPE said it will give each one Class A common stock shares for every share of HPE owned.

Software Development Gone, But There's Plenty More to Do

While developing software won’t be the frontline business anymore, HP employees on all sides of the company will still have plenty of products to make. HP Inc. produces lines of printers, scanners, digital cameras, calculators, PDAs, servers, workstation computers and computers for home and small-business use.

HP Enterprise makes servers, storage, networking equipment and a list of other backend IT system products. There’s lots of firmware to build, too.

HPE has negotiated a partnership with open source data center platform maker ClearCenter, which makes ClearOS. The two companies will custom build solutions running on HPE servers for small businesses that are simple to operate and affordable.

ClearCenter allows customers to pick and choose how much they want to utilize the cloud and how much they want to keep within their own network.

New Products in the Transom

Another heads up: HPE soon will be launching a new product called Edgeline Services Platform, which helps determine optimal places to process collected data—meaning whether to move the data store or the application, depending upon the use case.

Later this year or early next year, HPE plans to introduce something called New Stack.

New Stack will facilitate the management of cloud-based and on-site storage and computing solutions, utilizing HPE’s Cloud Cruiser and OneView platforms. New Stack is designed to eliminate bottlenecks in existing solutions but at the same time will add another layer of abstraction in the IT system which could cause some complexities.

Chris Preimesberger

Chris Preimesberger

Chris Preimesberger is Editor of Features & Analysis at eWEEK, responsible in large part for the publication's coverage areas. In his 12 years and more than 3,900 stories at eWEEK, he has...