HP Splits In Two, Will Become Separate Enterprise And Consumer Companies

By Lucian Armasu
published

HP announced today its decision to split into two companies: HP Inc., the one that will handle the PC and printer side of business, and HP Enterprise, which will handle the enterprise customers. The move will happen by the end of fiscal 2015, and layoffs ahead of the shift have now risen to a total number of 55,000 instead of the initially-predicted 45,000 layoffs.

Meg Whitman, HP's CEO, has wanted to separate the PC side of HP from the enterprise side since she accepted the position and after former CEO, Leo Apotheker, failed to enter the mobile market in a big way with webOS. However, HP was still the leading PC manufacturer at the time.

Since then, HP has struggled somewhat, losing some PC market share to Lenovo and others. Over the past year or so, though, HP has become more aggressive by adopting Android for its tablets and Chrome OS for some of its notebooks. HP is still an important partner for Microsoft, but it also wants to diversify by using other computing platforms. The new HP Inc., which will be led by Don Weisler as its CEO and President, will also focus on 3D printing and new computer experiences.

“HP Inc. will be extremely well-positioned to leverage its impressive portfolio and strong innovation pipeline across areas such as multi-function printing, notebooks, mobile workstations, tablets and phablets, as well as 3-D printing and new computing experiences," said Meg Whitman, now chairman of HP Inc. and CEO of HP Enterprise, in a company blog post.

HP Enterprise, with Meg Whitman as CEO and Pat Russo as Chairman, will continue to focus on servers (such as the recently-announced ARM-based server cartridges), storage, networking, converged systems, services and software and its OpenStack Helion cloud platform.

HP Enterprise should continue to do relatively well in the near future, but all eyes will be on HP Inc. and its new CEO, Don Weisler. Now that it will have even less money for itself, the new company will have to prove that it can sustain itself as a business. This will require some drastic cost-cutting as a way to make the company much more efficient and focused on what is profitable, but there must also be some big strategic changes.

HP Inc. will need products that are high-growth in order to increase the company's profits at a faster pace. One way to achieve that goal is if the company can figure out how to make 3D printers mainstream and position itself as the leading vendor. HP has been known as a premier printer company for decades, and what better way to evolve its business than into the third dimension? Otherwise, HP Inc. might soon be acquired by some other PC maker, which could also be part of the reason why the two companies are separating – making HP an easier acquisition target.

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Lucian Armasu
Lucian Armasu
Lucian Armasu is a Contributing Writer for Tom's Hardware US. He covers software news and the issues surrounding privacy and security.
7 Comments Comment from the forums
  • InvalidError
    In other words, if HP Inc. succeeds, we will soon have $100 3D printers with $300 DRM-infested refills.
    Reply
  • IInuyasha74
    Honestly I don't care too much what they do because I know at the end of the day their printers are still going to be more trouble than they are worth, their computers are still going to have the most problems and the highest fail rates, and their customer service is still going to be a very painful terrible processes. It would be great if they would go out of business so better companies would pick up the slack. Even Dell does much better in all areas though they charge a bit too much.
    Reply
  • Draven35
    Honestly I don't care too much what they do because I know at the end of the day their printers are still going to be more trouble than they are worth, their computers are still going to have the most problems and the highest fail rates, and their customer service is still going to be a very painful terrible processes. It would be great if they would go out of business so better companies would pick up the slack. Even Dell does much better in all areas though they charge a bit too much.
    Honestly I don't care too much what they do because I know at the end of the day their printers are still going to be more trouble than they are worth, their computers are still going to have the most problems and the highest fail rates, and their customer service is still going to be a very painful terrible processes. It would be great if they would go out of business so better companies would pick up the slack. Even Dell does much better in all areas though they charge a bit too much.

    Except, that reliability record is for their consumer machines, not their workstations. The two are developed by entirely separate teams....
    Reply
  • m2guel
    Honestly I don't care too much what they do because I know at the end of the day their printers are still going to be more trouble than they are worth, their computers are still going to have the most problems and the highest fail rates, and their customer service is still going to be a very painful terrible processes. It would be great if they would go out of business so better companies would pick up the slack. Even Dell does much better in all areas though they charge a bit too much.

    Do you know who would pick up the slack, the Chinese, but who cares right ? I do not think the US benefits from the $112 billions of revenue that HP makes each year, nor the hundreds of thousands of US workers and their dependent families.
    Reply
  • vern72
    I got a better name for the PC company: Compaq.
    Reply
  • IInuyasha74
    Well their workstations might be better, but their consumer units are garbage.

    @m2guel: Who do you think makes it all now? Most of the big tech companies are international, most don't finance in the USA, and the bulk of all hardware parts are actually created in other places. The only reason HP sells so many products is cause they cut corners in areas which lead to products failing fast so they are cheaper, and they have been around forever so people who don't know better trust them more. I don't think just because they are located in the USA means that they should be allowed to sell crap at the same price as good products and be given a pass. Shopping and actually caring if the laptop will survive for more than a year completely removes them from consideration on any educated shoppers list anyways so they are only surviving on the poorly made decisions of others.

    I never said we should pick up some Chinese company to do it all instead, but I certainly don't think HP should keep selling their crap products to people. If you want US products, buy Dell, IBM, or Apple (all of which like HP are actually created over seas). If you just want the best product for the price then you have Dell, Apple, Acer, MSI, Lenovo, IBM, Asus, etc. which don't make products nearly as bad as HP.
    Reply
  • VanceP
    I work at HP as a tech and we have been restructuring for the last 2 years for this, the announcement means only that the company is focusing on each group not getting weaker in any way by doing this... in fact it puts us in a stronger position for both markets. the tech support groups have been setup for this as has all departments for awhile
    Reply