HP: Business or B-School

October 7, 2014

Venerable Hewlett Packard may be a bellwether for other established high technology companies trapped in a time warp. Some hardware and services are enterprise centric. Other hardare and services are consumer centric.. Why not create two companies and double the fun?

The Bloomberg article “HP Split Is Latest Chapter in Whitman’s Change-Filled Career” does a good job of summarizing HP management flip flops. First, it is PCs and enterprise. Then it is to be split up. No, no. HP will not sell its PC and printer business. Oh, oh, wait. Now HP management will create two companies. Wow.

The write up states:

Whitman will lead Hewlett-Packard Enterprise, a business focused on corporate hardware and services, while Dion Weisler, the vice president in charge of Hewlett-Packard’s personal-computer and printer operations, will become CEO of that business. Whitman has been introducing new products and today she expanded a job-cut program to more than 55,000 jobs to trim costs. Hewlett-Packard, based in Palo Alto, California, has fallen behind in mobile computing at a time when consumers have migrated to smartphones and tablets, and last year lost its place as the largest maker of PCs to Lenovo Group Ltd. The split represents a reversal for Whitman, who ruled out a spinoff of the company’s PC division months after replacing Leo Apotheker, who had floated that possibility earlier that year. Whitman has since reiterated Hewlett-Packard’s commitment to the PC business on numerous occasions.

HP seems to be emulating IBM. Another parallel with IBM is HP’s expectations for content processing revenue. IBM has targeted $10 billion as Watson’s goal. HP wants Autonomy to pump billions into the HP coffers. HP and IBM have more confidence in content processing’s ability to generate substantial revenue than I do.

I look forward with interest to the unfolding of the two different B school approaches. I am not sure that Yahoo’s or HP’s will work. For me, the question becomes, “Which iconic high technology company has to flounder for a solution to revenue challenges?”

And, “What is Plan B for these over stressed giants?”

Stephen E Arnold, October 7, 2014

Written by Stephen E. Arnold · Filed Under Financial, Management, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.