Hewlett Packard Enterprise: Cut It Up and Sell Off the Parts
May 28, 2016
Someone called me to alert me to Hewlett Packard Enterprise was doing the mitosis approach to financial goodness. As you recall, gentle reader, Hewlett Packard chopped itself in half, emulating Solomon’s approach to shared custody. One part was printers and ink. The other part was everything not part of the printers and ink deal.
The resulting non ink outfit was dubbed Hewlett Packard Enterprise. The solution to HP’s revenue problems was to create two companies, make bankers happy, and ponder what to do next. The answer according to “Hewlett Packard Enterprise Surges on Move to Merge Services Unit with CSC,” is to create an HP outfit and a spinoff/merger deal.
The write up states:
The union will create a “a pure-play, global IT services powerhouse,” said HP Enterprise in a statement.
The HPE entity will sell hardware. The HP-CSC entity which seems to be called Spinco. Spinco suggests spin off or spin out and reminds me of PR spin. HPE is now free to become a big dog because the annoying little puppies like printers and ink and the thrilling EDS operation are at a minimum an arm’s length away.
I recall a series of MBA type paragraphs published by ZDNet. Hey, a listicle dragged out over six weeks is ideal for the mobile phone researcher. Navigate to ”Worst Tech Mergers and Acquisitions.” Number one with a bullet was HP and Compaq. HP also made the list at Number four with its purchase of Autonomy. Not bad 40 percent of the top five worst deals of all time in the eyes of the really expert ZDNet researchers.
I once tracked Autonomy closely. I have included information about IDOL in the forthcoming Palantir Notebook we are finalizing. In the last couple of years, Autonomy faded from my radar. Obviously it is not a giant blip on the HPE control room either.
Several questions/observations are warranted:
- Is it now time for the top brass at HPE to withdraw from the field of battle now that the corporate aircraft carrier has been refitted and once again sea worthy?
- What happens to those luck licensees of various Autonomy technologies?
- Will HPE continue to grow its revenues and once again hit the $100 billion in revenue mark?
- Will People Magazine cover the party the legal eagles, accountants, and financial institutions which worked on the deal will hold at the La Quinta in South San Francisco?
From my vantage point in Harrod’s Creek, Kentucky, I am not sure that the newly painted HPE will be able to match the performance of other, more modern money machines.
Stephen E Arnold, May 28, 2016
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