Commentary

Hewlett Packard Divvies Up the Future

Hewlett Packard, once hailed as the epitome of a well-run and forward-thinking Silicon Valley company but in recent years the victim of questionable leadership and draining acquisitions, officially became two entities yesterday in an attempt to regain momentum in both the consumer and enterprise marketplaces.

This morning, Meg Whitman, the CEO behind the split and the leader of the new Hewlett Packard Enterprise Co., which will trade as HPE, will ring the bell to open the New York Stock Exchange. 

“The company's emergence will mark the end of the yearlong process of dividing Bill Hewlett and Dave Packard's 76-year-old company in two,” writes the Wall Street Journal’s Robert McMillan. “But it also will leave a more pressing challenge before Ms. Whitman and Dion Weisler, chief executive of the second Hewlett-Packard Co. spinoff, HP Inc. [still HPQ]: How to remain relevant in an industry that rapidly is leaving the old H-P behind.”

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That’s happening quicker than an Uber driver will take you to your Airbnb rental from the airport as you access data from the cloud on your favorite mobile device. 

HP will sell the personal computers and printers that were once all the rage in homes and offices; Hewlett Packard Enterprise will sell commercial computer systems, software and tech services.

“Each of the spin-offs will face significant challenges: Demand for PCs and printers is continuing to decline, as more people use mobile devices and store their documents and photos online in the cloud,” writes Brandon Bailey for the Associated Press. “And in the commercial computing sector, more businesses are using online software instead of buying servers and other hardware from companies like HP.”

It’s not that these developments happened overnight, of course. “If Hollywood wanted a script about the inexorable decline of a corporate icon, it might look to Hewlett-Packard for inspiration,” writes IDG News Service’s James Niccolai for CIO.com.

“HP fell victim to huge shifts in the computer industry that also forced Dell to go private and have knocked IBM on its heels. Pressure from investors compelled it to act. But there are dramatic twists in HP's story, including scandals, a revolving door for CEOs and one of the most ill-fated mergers in tech history, that make HP more than a victim of changing times.”

Niccolai runs through many of those nasty turns of events past. For those looking ahead, USA Today’s Jon Swartz has a take on plans for the future after sitting in on a quarterly “Coffee with Meg” meeting at HP headquarters in Palo Alto last week. Whitman, CTO Martin Fink, CIO Scott Spradley and others met with start-ups and Hewlett Packard Ventures during the executive briefing. 

“For 90 minutes, a laser-focused Whitman was attentive, laughed, joked with participants and asked technical and marketing questions,” Swartz writes. “If only the historic split is so easy.” Earlier, he compared the attempted turnaround to “changing the engine on a car hurtling down a freeway without slowing down.”

But Whitman has experience in situations such as this, and has been preparing both companies for the reboot with a keen eye on performance.

“Ms. Whitman was an executive in charge of the Keds brand at Stride Rite a few decades ago as the company was making a transition to a new ‘high-tech’ warehouse. The transition was bungled, and for nine months the problem could not be fixed,” observes Quentin Hardy in the New York Times. “Ms. Whitman worried so much about a similar hiccup that during planning meetings for the HP breakup, ‘Can we ship Keds?’ became a sort of shorthand for worrying about bungling.”

More than recite the mantra, “a 500-person team inside HP has done over 300,000 tests of its systems to see if they work right, built 75,000 new ways to interface with its computers and cloned 2,800 applications to use in one company or another,” since the split was announced, Hardy reports. And its experience in doing such a massive job is the sales pitch it’s taking to other large enterprises, he tells us. 

Most stories this morning emphasize the tough task ahead for both companies. ZDNet’s Larry Dignan, for one, elaborates on each of the following bullet points:

  • Will either company invest in innovation? 
  • Can the two HPs still work as one in large enterprise accounts? 
  • Is Dell/EMC vulnerable? 
  • Will the restructuring-go-round lead to growth?
  • Does HP Enterprise have an answer for the cloud computing movement?
  • Will 3D printing save HP Inc.?

Meanwhile, a question for marketers everywhere else to contemplate is “How will 3D printing change our world?”

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