Hewlett Packard Enterprise launches: A more agile, lean HP?

Picture credit: Hewlett Packard Enterprise

It has been coming for more than a year, but now it is official: tech giant Hewlett Packard has split in two, as Hewlett Packard Enterprise (HPE) launches with $53 billion in annual revenue alongside HP Inc.

Despite the grumbles from analysts at the time – one noted that “splitting a business is never a sign of prosperity” while another, Bob Egan, told this reporter the move “provides a distraction to the real need of a business strategy” – the move to split up HP’s computer and printer business from its server and storage operations is a bold one.

“The winners in today’s market will be those who apply the power of technology to fuel the power of ideas, and the new Hewlett Packard Enterprise is built to accelerate this journey for customers,” said Meg Whitman, HPE president and CEO. “Hewlett Packard Enterprise has the vision, financial resources and flexibility to help customers win while generating growth and long-term value for our shareholders.”

In the mission statements accompanying the launch, the company said it was focused on four key areas to enable its customers to transform business operations; the move to a hybrid infrastructure; empowering a data-driven organisation; protecting the digital enterprise; and enabling workplace productivity.

This is not particularly far off from HP’s traditional silos for enterprise services; analytics and data management; applications; business process; data centre, workload and cloud; enterprise security; and mobility and workplace. According to HPE, the total addressable market for these four areas is $1 trillion, with four key operating units: the enterprise group; enterprise services; software; and financial services.

HPE also trumpeted various other customer achievements, saying it is among the two leading players in servers, networking, total storage and IT services.

Research from Synergy covering the cloud infrastructure equipment market in September argued HP had overtaken Cisco as the leading player in that space. At that time, chief analyst John Dinsdale said the split was in theory a “great idea” but warned: “Of course everything will come down to how well the transition is managed operationally. There is a lot of potential for management to take its eyes off the ball as it handles issues surrounding the transition.”

Whether this makes a significant change to the organisation’s fortunes remains to be seen; however, Whitman appeared bullish as the news of Dell’s $67bn capture of EMC – previously a target for HP according to the rumour mill – came in. In an email to employees, according to The Register, Whitman wrote: “All of this at the very moment when we have completed our journey to create two new, focused companies.

“We’re organised, we have a strong balance sheet and our innovation engine is humming. So, get out in front of your customers and your partners. Tell them our story. Take advantage of this moment,” she added.

 

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resrpt
4 Nov 2015, 5:20 a.m.

Splitting of companies make sense if one is a cash cow and other a growth engine. Where cash rich but low growth cash cow fuels the high growth low cash counterpart. Does not look like to be the case for HP. Of course only the time will tell what are they up to. However, if anyone can become the next Digital Equipment its HP. Sun Microsystems had the good fortune to be sold to an Oracle, who will be HP's Godfather?

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