HP shocked the tech world in 2011 by announcing that it was going to spin-off its PC division and become a software and services enterprise.
As it turns out, come October 2014, splitting HP to rid the enterprise side of the hardware business, including its printer division, is the best move for HP, according to Whitman.
"It will provide each new company with the independence, focus, financial resources and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders," she said in a statement.
So, what’s changed?
In 2011 HP was in no fit state to undergo a complex and expensive spin-off. Whitman said on a call with financial analysts on Monday that the rebrand of a new HP PC unit was pegged at $1bn back in 2011. By retaining the HP brand this issue is taken care of, Whitman claimed on the same call.
Furthermore, the requirements of the market mean that being flexible and focused on the evolving needs of businesses is a must. Whitman mentioned "nimbleness" several times on a call discussing the split as testament to this.
Peter Burris from Forrester agreed that the timing was right for HP as the market was effectively dictating that it has to streamline its business.
"The age of the customer is changing a lot of things in the tech industry, especially for companies like HP that feature an enormous portfolio traditionally focused on hardware and maintenance services," he said.
"The pressure is on to shift the focus to software and related business technology services, which is where customers, investors and partners see greater opportunity and value."
However, he told V3 that announcing the plan to split to sharpen its focus on software and services was only the first step in the journey.
"This is not the outcome. This is setting up HP for retaining what the real outcome is. Simplifying and targeting their software portfolio is not going to be a trivial exercise.”
Forrester vice president and research director Glenn O'Donnell expanded on this point: "Customers have had a love-hate relationship with HP software for eons. There are great ideas there, but a failure to execute.
"However, there is hope. The Autonomy acquisition is starting to give the software portfolio value - slowly.
"Still, many stalwarts of the software unit have languished, including its once premier operations and application performance families. HP needs to fix its software business or it is toast."
Hard times for hardware
This work will fall to those left at Hewlett-Packard Enterprise, overseen by Meg Whitman. The hardware unit, meanwhile, under the HP Inc brand, also faces some tough pressures once the split is completed.
Ranjit Atwel from Gartner told V3 that it was not surprising HP has embarked on this strategy. "It has not been able to find a home for its PC division that made sense within the enterprise and infrastructure part of its business,” he said.
However, Atwal was cautious on the future for HP Inc, noting that, while there were some benefits, it was not clear how its future would pan out.
“It allows the PC side to work with other partners and not just HP and may allow them to be more flexible, but at the end of the day the PC industry is pretty constrained across the board,” he said.
Atwal noted too that with software becoming increasingly cloud-based, such as Office 365, the chance to push more hardware sales in the enterprise based on software requirements is dwindling.
Even the printing unit, historically a cash-cow for HP, is suffering. The latest financials showed printing revenue down four percent year over year caused by a five percent decline in revenues for both printer hardware and printer supplies.
So neither side will have it easy. This was a point underlined by Arnaud Gagneux, vice president of technology transformation at analyst house CCS Insight, who questioned whether a split will cause costs to rise for both new entities.
"Both the PPS [personal and printing systems] and enterprise operations have seen declining revenue, and many are likely to question whether independence can change their fortunes," he said.
"The cost of the separate marketing, finance and purchasing departments for the two entities will increase HP's spending, and the loss of some economies of scale may affect HP when purchasing components."
There is another issue that HP shareholders especially will be turning over in their mind - will they screw this up? HP has a pretty poor track record on acquisitions - look at EDS and Autonomy - so will a spin off be any smoother?
“Whether they can execute this given their historic mergers and acquisitions record is still to be seen," added Atwal.
The split is not set to complete until late 2015, so there is at least time for HP to push through this break-up.
As Burris from Forrester noted, with mergers it's hard to define when the ingestion of another company is completed. With a split there's a clear end point.
Ultimately, whatever happens next for HP, it appears that the era of the tech behemoth that supplies everything from laptops and printers to software and services is coming to an end.
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