Groan, will they be calling it Compaq?
Why not spin off Autonomy and Palm while you're at it?
HP has confirmed the industry’s worst kept secret – since yesterday anyway – that it is to carve the business in two, with printers and PCs on one side and all things enterprise on the other. This is a massive U-turn by CEO Meg Whitman, who has claimed repeatedly the organisation would not be split – as had been imagined by …
Except the new owners will be the old owners. The different is that the old owners can slowly divest themselves over time, though that looks to be less than likely in the short-term as Whitman is staying on as a "nonexecutive chairman".
The only thing that might change is that there will be a better line of communication from operations and support to the top of the food chain, and the only thing that the new HP Inc will have to trade on is their PCs and Printers. Assuming of course this change doesn't also signal a move into the smartphone and tablet business as part of the PC business.
your fecking laptops - although i make a huge amount of money out of shimming the gpu heatsink and reflowing the gpu's, the overheating gpu issue has been around for what, 5 years or more now and you still havent fixed it.
i used to love hp kit. well, actually, i used to love compaq kit. then hp compaq kit for a bit. after that,. not so much.
There may have been a time when HP made really good computer equipment. Unfortunately it was about 20 years ago. At the time they were quite out of my hobbyist price range so I was never able to purchase any and therefore cannot speak from practical experience. But they did make damn good printers back then. I expect the Laserjet IIISi I used at my first job would still be cranking out the pages if HP had kept up the spare parts.
So I am not the only one with a burnt left wrist... When I finally got tired of my laptop shutting down due to overheating, I considered taking it apart and putting better thermal grease between the cpu/gpu and heatsink. Then I had a better idea that was a whole lot less work: put a big fan next to the laptop that blows right-to-left. Works great, but now my hands are cold.
Taking it with me on a trip has never been an issue since the battery only lasts about 30 minutes.
So HP Enterprise will now look focus on high-value service contracts, government projects and other such enterprisey stuff to realise their higher-than-inflation and higher-than-analyst-prediction quarterly growth figures. Eventually selling off their standard Proliant range server division (Hypervisors killing the lower end server market) and leaving their customers will increasing services costs or cast into the ether.
The new consumer division will wallow in a sink-or-swim (probably sink due to fewer people using printers and fewer using PCs) turmoil as the try to monetise every new hype that raises its head before being swallowed by Lenovo for a few bucks.
I wouldn't be surprised if HP resurrected those negotiations to buy/merge with EMC on the enterprise side.
I agree on x86 servers. Eventually they will be like PCs, pure commodity... already getting pretty close. I'm not so sure they will sell it off though. HP can compete based up price with their volumes with Lenovo. If they sell off x86, what do they really have on the enterprise side? A services business which is in long term decline, HP-UX is basically done, storage is an also ran. x86 servers is their only leadership category... which is why some show stopper deal needs to be done, like merging with EMC... or at least the hw division of EMC.
I assume it'll be a fairly clean split between PPS and EG*, because that's how HP currently operates. In that case the industrial printers (Scitex etc) will stay with the company formed out of PPS.
In reality the PPS and EG groups have different staff, different rules and different relationships. The two 'halves' of the current HP business are so inconsistent and dissimilar that if you put two people from EG and PPS in a room you may as well be talking to people representing two completely different vendors.
Personally I don't think this will go well for them; I believe that once separated they will lose strength compared to companies like Dell and Lenovo which retain fingers in all the pies. The one and only good, real solution is to fix HP's problems. This split is just the old trick of cutting the magician's assitant in half to wow the shareholders for five minutes.
* It's not a one-size-fits-all thing but in general terms:
PPS = Print and Personal Systems (i.e. printers, scanners and PCs)
EG = Enterprise Group (i.e. servers, storage, networking)
We're not so much anti-HP as anti-theiving from people off the reputation of the old guard who are now long, long gone. We remember when they made good equipment, especially printers. But that was before Carly's stint in the CEO's office.
Bullseyed - "Doesn't matter, nobody who knows what they're doing buys direct anyway. You'll still be able to go to your local reseller for all in one service, who will go to their distributor of choice for all in one service."
No, you can't. Not for the real enterprise printers - they are heavily restricted to HP Direct and a handful of specialist imaging and print channel partners in the UK. I've not done anything with HP print for some time but a few years back you could count those specialist companies on both hands and have fingers to spare.
Bash 'HP Scitex' into your search engine of choice and, as the title says, you'll see that we're not talking about a LaserJet MFP sat in the corner of an office.
HP's portfolio is much, much broader than most people realise - as far as I'm aware it's the broadest in the industry by a long way. Not only that but a lot of it is really good stuff if used for what it's designed for (naturally some of it is crap, but such is life).
It really is a shame that their solution to being unable to steer such a behemoth is to shoot it in the knee.
1) As business dynamics evolve, what was reasonable(/feasible) yesterday may not be today.
2) As incorrectly reported(/trolled) by el reg, this idea has been around before Leo. His fault was prematurely discussing it openly. I am all for openness in general, but you can't play poker with an open hand.
3) Splits are done primarily for shareholders, not for consumers or employees - so they can decide with greater control what they are buyng for 1 dollar. Autonomy is just a problem to be solved.. only question is what is the cheapest way to do it.
4) And for hopefulls, let me be the bearer of bad news - in all likelihood Autonomy is already dead. (Maybe someone still workingthere can confirm).
Sadly it will be the staff who pay for this split. Again.
Any costs incurred for the split will need to be offset by cost cutting to show that the impact of Megs master plan will be near nil.
Especially after peddling lies for the past couple of years.
Sadly its the common worker that will again feel the impact of HP's mismanagement.
In the short term it should create jobs rather than make staff redundant.
It is mergers that usually wipe out a large number of staff. A good merger should reduce costs as you don't need two separate departments like finance and don't need double the assets like buildings etc. So some of your fixed costs and operating expenditure is shared over two companies.
The reverse happens in a split and also each separate company will look to grow, possibly with new acquisitions, etc.
However, I would be surprised if the HP PC & Printer division lasts more than a few years so the redundancies might come anyway as someone else swallows them up or asset strips them.
Splitting their business up is the wrong direction to go. In my opinion, the problem with HP is that they were already too fragmented. They are in the unique position to build a truly unified network. Some ideas I had:
*iLO in desktops and laptops, especially if those interfaces could be used to connect back to the home office via an SSL VPN or something allowing full remote control of systems no matter where they are. Perhaps use iLO as a boot method to turn the device into a thin client and connect to a machine wiht iLO hardware
*An asset management device that would allow network devices to configure themselves based on the device plugged into each port. The same device could push a configuration to the connected system as well to point it to the nearest printer and letting the device know which printer it went to.
*Adapting the iLo protocol to be used for VDI (I know quite a few IT departments that would kill for an OS-agnostic VDI solution).
*Making iLo free (A company I worked at ended up going with KVMoIP appliances since it would be cheaper than activating iLo on the servers)
*Build WebOS into the BIOS of system, giving the user a full diagnostic environment or even a client/server for iLO, right out of the box.
With the proper set up, you can end up with a scenario where a user brings in an HP tablet from home and connects it to the corporate network, at which point the asset management device recognizes it and reboots the device. Once the device has rebooted, it would connect to that employee's VDI instance over iLO, giving them full access to their work environment without endangering the network or its data. Then the user can go about their day going to meetings around the building or to different building while being able to print to the closest printer without needing to configure a thing.
But if almost no-one has an HP tablet and noone would be prepared to buy an HP tablet with the extra cost of iLO built-in then the company would have to buy them.
In that case you might as well just use Knox or MDM or the Apple BYOD tech and can lock down the workplace side themselves.
The enterprise and SMEs are the few remaining places where PCs are not going to go anywhere for a while so they might have been sensible to keep a pro range in the Enterprise sector. I think a natural expansion would've been into telecoms - IP desk phones and IP PBX systems along with video and audio conferencing an meetings. Consider the business as a whole and aim to fill it with kit which has added value when it is all from the HP (not from a user perspective, I hate lock-in but from their perspective)
That's kind of the point, if HP were to make a decent tablet that can be used both at home and at work, users might be inclined to buy one rather than carrying around a work laptop and their personal tablet (especially if they get a discount).
As for Knox / other BYOD stuff, they work, but my point was to make it so much simpler so they company doesn't have to do it themselves.
Yes, they really need to get into telephony. Ultimately they should hope to be a 'one-stop-shop' for a company's technology. Make one call and everything IT is good and done. It'd be good for them, as you mentioned, from lock-in.
Mandatory troll - iLO fetish much?
As HP have found out over the years, if you build in features which increase costs then a small minority will sit in the corner quietly loving them for it. The other 95% will just go somewhere else and buy the cheapest option that doesn't have that value added option (that they didn't want in the first place).
Due to HP's margin retention policies HP client devices (let alone enterprise kit) are already relatively expensive for no particular reason. The last thing HP needs is to take machines that they already sell above market value and add £30 in extra functionality that might be used by a relatively small group of users.
I imagine that most IT departments would rather have a platform agnostic VDI solutions that supports a small selection of the most popular operating systems, than a platform-locked VDI solution that supports every OS. Practically speaking most environments are going to run Windows or Linux anyway so there's no benefit to locking yourself in to a platform based on iLO tech.
iLO Advanced will never be free until other companies set the precedent; but in the grand scheme of things it is not particularly expensive.
iLO in PCs -- if you're willing to spend the money and licensing costs for systems management software that's compatible with it, Intel vPro offers the most useful chunk of that functionality. We're currently looking into it. Intel and the device management software manufacturers have purposely made it complex to implement, but it's there.
just the mention of it - aargh - I'm off to get the garlic, wooden stake, and whatever else is needed to stave off creatures of the night.
iLO is nice but the firmware seems to go through a zillion releases before it's stable. Actually iLO standard is good enough for our remote command-line needs, using an SSH connection.
I don't want to think about vPro, there is just some much schlepp to set up the prerequisites on the system from which it will be accessed.
"Splitting their business up is the wrong direction to go. In my opinion, the problem with HP is that they were already too fragmented."
And they incur significant cost every year trying to repair that fragmentation. The relationship is fundamentally flawed and this allows the channel to handle it instead.
They are in the unique position to build a truly unified network. Some ideas I had:
And right there is HP's insurmountable problem. If they are uniquely positioned to see and build this Killer App and haven't done so while you who are not uniquely positioned to see it can, they're sunk.
Or you could be talking out your ass.
Or maybe even both.
Having worked for a number of large corporations in my life and having seen the results of splits, mergers, takeovers, buyouts, etc., I'm wondering if we are finally reaching the logical end of super-corporations.
There was a time where it made sense for a parent company to buy unrelated companies, let them be relatively autonomous, and just book the revenue and profit. That's how you end up with a situation in which General Electric owned NBC. Then as those fell out of fashion, mergers and acquisitions focused on building a patent portfolio for the Great Patent Wars of the Aughts and Teens or to expand capabilities into a related but tangential market. That's how you ended up with Google (temporarily) buying Motorola Mobility or Microsoft buying out Nokia.
And those last two, I think, are actually the dying gasp of the last strategy. As the hangover from the Great Recession and the lost 2000s after the dot-com bubble start to fade into history, I wouldn't be surprised if shareholders kept demanding that tech companies (and non-tech companies) start to look at how disparate functions within the super-corp can be split out into two or more chunks. With a marketplace that has favored the bold and nimble for the last 5 years, the corporate bureaucracy of an HP or MS just can't bob and weave anymore.
Plus, I think shareholders are getting wise to and tired of the notion that some product lines support others because they can't be profitable (see Windows/Office supporting pretty much anything else, including XBox, that MS tries). If it doesn't float in a few years, no amount of subsidy from other regions of the balance sheet is going to help.
It is in fact just the Great Orbital Cycle of business management, which swings from an apo-something of supercorporations too big to fail to a peri-something of individual business units. With the split of eBay/Paypal we are well into the downward swing of the cycle.
Corporations become huge for a variety of reasons, some of which are good (different product cycles needing investment in different areas at different times, and genuine synergies) and some of which are bad (CEOs wishing to swing enormous genitals and pay themselves huge amounts; the ability to bribe entire governments.) But modern technology should make it possible for small companies to co-operate to deliver large systems where needed, while not having the vast overheads involved in managing the management of the managements where smaller projects are concerned.
It's a fundamentally chaotic system which doesn't have a way to reach a sensible equilibrium and stay there, as the German economy did for so many years with its large Mittelstand.
With the split of eBay/Paypal we are well into the downward swing of the cycle.
And another one: the company that used to be referred to as "a large lightbulb manufacturer in the south of the Netherlands" is going to be two not all that large manufacturers, neither of which makes lightbulbs (or even its current equivalent: LED bulbs) anymore.
A good point. However if you look at their current business strategies, they aren't counting on bobbing and weaving anymore. They've counting on buying politicians and getting lock-in contracts one way or another. And that's something those slow corporate bureaucracies turn out to be very good at doing.
> ...before HP span off Agilent?
Yes, except that HP did not spun off Agilent. Agilent *is* Hewlett-Packard. The consumer rubbish / quick buck side of the business that the shareholders forced the founder's families to spin off just took the HP name because of the brand recognition, something which The Bit That Made Real Stuff did not need anyone, as it's mostly B2B anyway.
I had not bought a single HP-branded product since the Agilent debacle, and I'm very proud of it.
So, it sounds like they're hiving off PCs and printers to give them an excuse to strangle the life out of the business and kill it. Good job, HP, following right along with IBM's playbook so far. Focus on high margin servers, software and "services." Because any company that makes any physical products anymore is a total chump that's undeserving of investment.
The problem with this IBM model is that HP's "services" division is the old EDS...and it's even worse than IBM's "services" division. Servers, with the exception of the Itanium write off they'll have to do in a few years, are still pretty healthy. But without the other divisions driving end user demand, the talent is likely to go elsewhere.
If it were me, I'd just take an axe to the horrible crapfest that is their consumer line of PCs, laptops and printers. That's what needs fixing -- tons and tons of different HP Pavilion models, each made for a particular retail chain, with almost no support. And the $49 printers designed to prop up the ink division -- not a good long term strategy. Everything consumer that HP has done isn't worth buying. Their high end laptops and PCs are good. (laptops' current design sucks, but they don't break in 89 days.)
After years of struggling, this is the end of yet another giant of the American engineering. Wonder what USisans think of all their big technology business going down the drain... oh wait, surely they have replacements in place: Google, Facebook, Microsoft.... show me one of these that can build things with the quality and durability that HP did in the old days.
Grumpy rant over. My HP-41C still works.
What I want to know is, where will the corporate headquarters of each company be? EDS's headquarters building is still available in Texas. And are there still a number of Compaq buildings available in Houston for the PC arm? Opportunity to move both corporate headquarters out of California to Texas? Or is there a possibility for an inversion here and move HP (both arms) out of the US?
And who gets all of the IPv4 IP addresses? HP has two class A network blocks. (won't that be a fun split....)
"And are there still a number of Compaq buildings available in Houston for the PC arm? "
I can answer this having just visited this year: No.
The once sprawling and mighty campus that was Compaq has been reduced to just 3 buildings supporting server and rack manufacturing ONLY.
All the rest of the buildings have been sold and leased out. Go to Google Earth and look at the size of that place.
Compaq was a model corporate campus in its day. Each building had it own upscale cafeteria and hired damn good cooks and chefs. They had concierge even for the lowliest employees. On campus clinic as well. Mini shopping mall.
Gone. Nothing left but 2 assembly plants and a materials building and some very, very screwed former Compaq employees.
How did it end up going begging with hat in hand for a buyer? You can directly blame a certain bean counter, but that's a story for another day.
HP should have gotten out of the PC business years ago and...
...should have cleaned up their printer driver software (great printers, shit software)
...should never have gotten rid of the IPAQ (way, way ahead of its time)
Their biggest problem was the same as IBM's in the PC market: too much proprietary junkware.
Someone in our office decided we should switch from Xerox to HP. We just got our first two new HP printers in the other day. My first reaction after we have one out of the box and powered up:
this thing is built to break under ordinary use.
It wasn't helped by the idiots who placed the order. Basic printer, no scanner/copier, no large capacity tray to replace a Xerox floor unit that loaded three sizes of paper with one spare for the primary paper. In fact, the most recent Xerox we got in had 6 paper bins not counting the manual feed.
It is now lots of things:
HP printers & lappys.
HP big iron
This list goes on, but it isn't Hewlett Packard any more, just HP and the minions.
Apologies to Bill and Dave, may they rest in peace.
Oh, and layoffs ("Workforce Reductions") keep on coming. Been there, done that.