HP Split: No Profit, No Loss for CIOs

The move to cleave HP is aimed more to streamline the company rather than impact CIOs

The news of IT behemoth HP’s split didn’t come as a surprise. It was a journey that HP had been preparing for a long time. Others (notably IBM) had already taken that road. Big Blue had sold its personal computing business to Lenovo back in 2005.

As a result of the division, one HP will give way to two entities. The business-focused Hewlett-Packard Enterprise will offer infrastructure, software, and services to corporates while HP Inc will play in the computing and printing space. The two new companies will have revenues of $ 57 billion each and will find a place in the list of Fortune 50 enterprises.

So how does this change impact a CIO? Well, in the short-term it doesn’t impact an enterprise technology decision maker in any way.

A CIO was earlier dealing with two account managers – one from Printing and Personal Systems Group (PPG) and one from HP Enterprise Business. Going forward, this won’t change. As certain products under PPG (workstations and Workgroup printers) are aimed at the enterprise segment, a CIO will have to continue dealing with two separate account managers.

A small incremental value that a CIO could hope to gain through the division could be in the area of support. With a smaller bouquet of products, he could expect a higher level of focus from the vendor on the enterprise range of solutions.

The move is actually aimed at HP itself. The idea is to put its own house in order. While laptops, PCs and printers are low-value and high volume products, they need a different growth strategy. The enterprise solutions are high-value and demand a completely different mindset to market.

With the split, the two companies can focus on their respective strategies. This can lead to better and more innovative products, and eventually a lot more agile and focused organization.

However, these are very early days for a CIO to gain from such innovative solutions from Hewlett-Packard Enterprise.

The best approach for a CIO would be to just wait and watch how this split plays out in the market. It will anyways take about a year for the two companies to start functioning independently.

Meanwhile, it will be interesting to watch how HP would split the huge cash pile it is sitting on, and also the huge debt it is saddled with. The company has more than $14 billion in investments and cash and close to $20 billion in debt. 

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