Hewlett-Packard: The Split Up

Yes, it’s been all over the place. Hewlett-Packard has finally split up. One has become two. What HP CEO Meg Whitman used to say that Hewlett-Packard is inseparable – as she contended that HP has this most coveted pricing power in all its markets – is no longer a fact.

Hewlett-Packard-HQ-Palo-A-008It’s now Hewlett-Packard Enterprise led by Meg Whitman and HP Inc. where Dion Weisler would be CEO. The former would be focusing on corporate hardware and services while the latter on personal computers and printer operations.

All these brouhaha since HP failed to keep up with the shift away from printing and personal computing – from a new landscape in technology. Well, not only the split up but there has also been negotiations to merge with giant data storage business, EMC.

As Whitman said in an interview, “Nimbleness and speed are going to be an important part of the future. By separating into two companies with quite distinct markets, with quite distinct customers, we’ll be able to move faster to take advantage of the changing customer needs and accelerating our product and innovation road map.”

If you were Whitman, would you do the same?

If only for “focus” and not breaking up then Whitman was doing a bad job and so the split up. And true enough. Why would HP struggle anyway?Still, HP could have gotten the job done by just reorganizing and reassigning tasks from within. Whitman could have done better by not leaving any stone unturned, by analyzing the system first; yes, if only for focus.

Meg Whitman, Hewlett-Packard Enterprise CEO

Meg Whitman, Hewlett-Packard Enterprise CEO

Then again, looking at cost efficiency – by breaking up the company, you lay off duplicate workers and save dollars. However, you could also be overpaying your new CEO and other unnecessary executives.

Nonetheless, although there would be lesser confusion with a more specialized organization, one of the bigger questions would be its past. What would happen to HP’s laboratories now that they split up? This could be costly – the structure, the equipments, the depreciation notwithstanding and so on.

Solutions abound. It’s just a matter of having the right leader. For one, do they exactly know where they are in the race? Analysts say the split up would only benefit HP and its shareholders not its customers, the author says this is true if they do not have the right map.

What’s your take?

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