For HP, Symantec, Others, Breaking Up Can Be Hard to Do

by Jeffrey Burt

Within 12 months, HP will become HP Inc., which will sell PCs and printers, and Hewlett-Packard Enterprise, an IT solutions vendor. CEO Meg Whitman said the restructuring efforts of the past few years made the company strong enough to split up.

Company officials in the past reportedly had discussed separating the security and storage businesses, though past CEOs resisted. Michael Brown, who took over the position in September, supports it.

The two companies have been together for 12 years, but that ends next year, something activist investor Carl Icahn had been pushing for months.

Big Blue has been shedding low-margin businesses for years to focus on such growing markets as software, analytics and the cloud. IBM sold Lenovo its PC business in 2005; on Oct. 1, IBM closed a $2.1 billion deal selling its x86 server business to Lenovo.

Juniper for months has been under pressure by investors to streamline the business and improve the bottom line. The networking company sold off its mobile security business to Siris Capital for $250 million, creating a new company, PulseSecure.

HP in 1999 shed its test and measurement business, creating Agilent. In September, Agilent announced it was spinning off its measurement subsidiary, Keysight Technologies.

Motorola in 2011 broke into two companies, Motorola Mobility—selling consumer products like smartphones—and Motorola Solutions on the commercial side. A year later, Google bought Motorola Mobility for $12.5 billion. Now it’s selling Motorola to Lenovo for $2.9 billion.

The company last year unveiled its Shift Plan to get back onto financial footing, and part of that plan was selling assets to gain $1.3 billion. Most recently, Alcatel-Lucent sold 85 percent of its enterprise business to Chinese investment company China Huaxin.

Investor Elliott Management, which also is involved in Juniper’s situation, is pushing EMC to sell off all or part of its 85 percent stake in VMware. CEO Joe Tucci has said he is reluctant to sell off such a “strategic asset.”

Almost immediately after HP made its announcement, analysts started asking whether Cisco should do the same. Cisco is extending its reach in the data center and branching into the cloud, software and Internet of things.

The now-private company has been aggressively building up its capabilities in networking, storage, software and security to become an enterprise IT solutions and services vendor.

It’s hard to imagine a more acquisitive tech vendor than Oracle, which is rapidly bolstering its reach in everything from data center hardware to the cloud.

The company used its purchase of IBM’s PC business to become the world’s top PC vendor. Now it’s turning its attention to servers (with the latest IBM deal) and smartphones (with Motorola).