Hewlett Packard, one of the most storied technology companies in the United States, will be splitting into two over the weekend. The company is considered to be another casualty of the massive changes that impact how consumers use technology. HP is undergoing the split due to its sluggish response to change - a typical problem with big companies.
HP was one of the pioneers of Silicon Valley start-up companies. The company was established by a pair of Stanford graduates way back in 1939 in a garage in Palo Alto, California. It grew into a company known for its engineering prowess with a laid-back corporate culture, making excellent profits as it became a multinational giant in selling a variety of computer components and commercial technological services.
However, HP found itself struggling to keep up with recent tech trends, such as the rise to prominence of smartphones, along with cloud computing. In response, the board of HP last year decided that the company needed to split up into two companies that had narrower focuses.
On Nov. 2, HP will be separated into HP Inc. and HP Enterprise. HP Inc. will mostly focus on the personal computer and printer business. HP Enterprise, on the other hand, will mostly focus on sales of computer servers, networking, data storage, consulting services and software that are needed by modern companies.
Both HP Inc. and HPE will be expected to rake in revenues of around $50 billion per year and be among the 500 biggest public companies of the United States, with the companies to begin trading separately on Nov. 2 on the New York Stock Exchange.
HP "missed the emergence of the Web," according to Forrester Research tech analyst Peter Burris, adding that the company also "missed the emergence of mobile."
According to HP CEO Meg Whitman, who advocated for the splitting of the company, the two new spin-offs will prove to be more nimble compared to the old HP in terms of responding to market changes and trends. Whitman will move on to running HP Enterprise, while Dion Weisler, a veteran in the PC industry, will be heading HP Inc.
"With less to focus on, each company will do core things better," Whitman said last month in an investor conference.
HP Inc. and HP Enterprise will be seeing significant challenges with HP Inc. facing the declining demand for PCs and printers and HP Enterprise needing to address the trend of businesses utilizing online software instead of purchasing hardware and servers.
"It's reasonable to think both can be thriving companies, but a lot will come down to the quality of their management," said Burris though.
