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HP to Split into Enterprise & Consumer Companies

hp logoIn a rather cryptic announcement today, HP has confirmed that the company will split into two entities, separating its PC computer and printing business from its enterprise technology services such as software and data storage. The PC and printer business will use the name HP Inc. The services business will be called Hewlett-Packard Enterprise.

So why do the split? The strategy is to provide each new company with the focus, financial resources and flexibility to adapt quickly to market and customer dynamics while generating long-term value for shareholders

According to IDC, HP is the market leader in the HPC server space with approximately 31 percent share. As the company has healthy margins in this space, insideHPC forecasts business as usual for Hewlett-Packard Enterprise going forward in the high performance computing sector.

On the enterprise side, current HP CEO Meg Whitman will lead the business, while HP PC and printer chief Dion Weisler will become CEO of HP Inc. Current lead independent director Patricia Russo will be chairman of the Enterprise unit, Hewlett-Packard announced.

The split is expected to be completed by the end of the fiscal year 2015. Both companies will be publicly traded.

The decision to separate into two market-leading companies underscores our commitment to the turnaround plan,” Whitman said in the announcement. “It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders.”

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