Hewlett Packard: A Future of Uncertainty
August 7, 2016
I read “Private Equity Ponders Hewlett Packard Enterprise Buyout.” I think this is called a tap out in millennial lingo or quitting in less zippy language. I recognize that absolutely everything I read on the Internet is true. Especially Information.
Hewlett Packard has created some of its problems (Board of Directors’ issues, the exciting Autonomy matter, and the great mitosis which saw ink go one way and enterprise services another.) Other problems are external. Who imagined Amazon, the digital Wal-Mart, becoming the big dog in cloud computing. The economy? Well, let’s leave that to the political and economic wizards with MBAs, CPAs, and lawyers, lots of lawyers.
The write up, which I assume is spot on, informed me with information:
Several private equity firms including KKR, Apollo Global Management and Carlyle Group are sniffing around Hewlett Packard Enterprise, contemplating a buyout of the firm, said a person who has had talks with representatives of the firms. Such a deal would be worth more than $40 billion.
What else does the write up assert? I don’t know because after the “exclusive” and the fetching factoid, I have to pony up dough to learn more. My hunch is that the green eyeshade crowd believes that the individual chunks of HPE are worth more than the company in its present form.
Fortune Magazine, once a unit of America Online, knows of what it speaks in “These Private Equity Firms Could Be Looking to Buy Hewlett Packard Enterprise.” No one is exactly sure what’s afoot. I highlighted this passage:
Regardless of the conflicting reports, it seems that HPE is undergoing another significant transformation again.
I like the “transformation” angle. It reminds me of Dr. Daphne Swartz’s lecture in Biology 101 about the caterpillar to butterfly thing. You know a crawly worm with fur becomes a winged creature with nifty scales. These scales impart the color. Otherwise, the butterfly’s wings, like the emperor without clothes, are not much to look at.
What about Autonomy I ask myself? Well, it seems that it is a race to see who will sell the software first. Hewlett Packard seems to be shopping the unit. But if those fun loving green hued folks get their first, some other pavement pounders will get in on the act.
What’s this mean for licensees of Autonomy? The sunk costs can be fascinating. Unlike the colors of the butterfly’s wings, the costs of training, tuning, and maintaining the system can be spectacular.
The turmoil swirling around HPE is chaotic, maybe disruptive. To some, that’s a good thing. To those who just want to find information, the future looks like a furry caterpillar: Ugly and pesticides infuse the stuff the worm eats.
Stephen E Arnold, August 6, 2016
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