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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.
eWEEK 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.
Software Managers Seeing a Seamless Refresh at Divided HP
“This transition has been incredibly well-planned. It has become a different way of operating; what has been increasing is the collaboration across the teams. It’s massively better now that we have the enterprise focus. I think it has a lot to do with Meg (Whitman, the CEO). Meg is leading from the top; she’s not forcing collaboration—she’s encouraging it with a smile.
“We’re solving problems across business levels like we’ve never done before.”
“It’s (the separation) almost a nonevent,” said Randy Cairns, head of communications for HP Software and Enterprise Services. “We’re already running in that mode. It’s really true.”
Transition Was ‘Seamless’
Ritthaler said the internal separation project, dubbed IT Apart, “was almost seamless. It’s an amazing story. The way they planned it out in traditional planning charts, it used to take years. It ended up taking weeks,” Ritthaler said. “We were all brought to Atlanta a year ago to make sure we knew how to coach our people, what to expect and how we’re going to work differently, and it’s all paying off. I’m really bullish about it.”
But how are they doing this on a daily, routine basis? It’s one thing for the CEO to set the tone, to be the lead example, and for managers to take some classes, but when people get down to work, what’s changed?
“I’ll give you an example,” Ritthaler said. “Transformation to a hybrid (IT system and cloud model) is one of our four core solution areas. Instead of it being a collection of ‘stuff,’ which might have been the way we would have done it before because we had a lot of different divisions, we actually pulled together a strategy two to three quarters ago around [hybrid]; not just a technical strategy about how we want to build things across the R&D labs, but a go-to-market-led strategy that said, ‘How do we effectively talk to customers? How do we leverage a channel?’
“Then we worked from that back into what we need to go make in terms of solutions. It was all of us in the room together. When we look at what we’re building, it’s a collaborative effort.”
It’s now also a lot easier to share technology, Ritthaler, a former Dell and IBM executive who’s been with HP for two years, said. “We’re making it dead simple to share the common components we all need to build these solutions,” he said.
Smaller Staffs Make It All Easier
Simply having fewer people to deal with counts for a lot.
“It’s noticeably smaller, even on the corporate side, where we have all those shared resources,” said Maria Bledsoe, senior manager of product marketing for Enterprise Security. “It’s much more contained and much more focused now.”
“Even things like functions, like global marketing; remember, global marketing [previously] had an enterprise group, then we had the PC Personal Systems Group, a software group … now the Enterprise Group and the software group are together,” said Genefa Murphy, vice president of product and partner marketing for Application Delivery Management.
Overall, the separation process is pretty much old news among the employees at HPE. With the refresh of the company, there appear to be more than a few rays of hope among the foot soldiers in the field.
The open question, of course, is this: Over the long term, how will partners, customers, investors and even other HP employees really believe this will all work out? Skeptics are always going to be there, especially in the investor community. It’s hard to get everybody thinking in the same direction.
Even if some managers see this as a positive move, the breakup is still a gamble. But when eggs are broken, value comes forth. The gamble is that two smaller and more agile companies will bring new value to a very fast-moving technology marketplace.