Hewlet Packard and storage giant EMC
The decision to split Hewlett-Packard will be the defining moment of Meg Whitman’s position as CEO at HP (Hewlet Packard )
It has been reported that Hewlet Packard and storage giant EMC have been talking secretly for months about the possibility of a merger and of course Meg kept her powder dry during the recent Canalys Conference in Cannes France. The idea was broached continually by Steve Brazier although no information was forth coming Two historically successful companies that both need a flash of energy and also need to enter new markets to keep that growth going.
Image JACOB KEPLER / BLOOMBERG, 2013
Being a huge corporation isn't always good, especially in the IT products and services business, this means slow, possibly disjointed companies who can lose their way. Each and every company whether large or small needs to evolve well enough and quickly enough to keep abreast of changing environments and maket requirements.
At first glance, the idea looks interesting, and the companies apparently came close to actually doing it a few months ago. But the deal fell through, largely because each of them didn't think their shareholders would ultimately approve it. Now that HP is splitting up, the idea is said to have been revived in both headquarters.
HP, which is renaming its enterprise software/services business Hewlett-Packard Enterprise, is breaking off its PC and printer businesses into a separate company called HP Inc., a far too-similar name that's sure to confuse people for a long while.
The news that HP is planning to split is causing uncertainty in channels on which competitors can be expected to capitalise. Giorgio Nebuloni, Research Manager, Datacenters, at IDC EMEA says: "HP's stated goal is to have an increased focus, faster decision-making process, and ultimately different long-term strategies and investment roadmaps for the two business blocks.
Tellingly, HP Inc. (PC and printer) is depicted as a stable business with predictable returns and an organic growth pace, while Hewlett-Packard Enterprise will see 'targeted merger and acquisition activity.' In other words, the enterprise side, which is the one HP aligns most to IDC's 3rd Platform vision, is the one where IDC expects to see more radical changes and bets on in the future. Overall, and despite the trends over the past nine months, we believe the underlying assumption is that HP Inc. is poised to face headwinds in the longer term, while the enterprise part can be boosted by significant growth with the correct investments."
In channels there is more uncertainty: Chrystelle Labesque, Research Manager, Personal Computing, at IDC EMEA says "As happened in 2011, IDC expects competitors such as Lenovo and Dell to try and leverage this and to try to lure smaller resellers and distributors away with a 'unity' message. On the positive side, HP is in a much better organizational and financial shape these days and has a clearer story for the market. In the two-tier EMEA channel, which the company dominates, having two HPs could go either way: each supplier might weigh less and be less dominant, or it could get more room to focus and grow. In the mid term, we maintain that the split could end up being costly particularly to the volume side of both houses — HP is clearly looking at the longer-term horizon, but a strong acceleration in the value-add segments or in brand new markets (e.g., 3D printing, Big Data analytics, etc.) will be needed to prove the move worthwhile."
