HP's Mitosis, One Focused On Enterprise While HP Inc Targets SMB And Consumers

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It’s interesting to see how once might tech giants can circle the drain, ending up as a hollow shell of their once powerful selves. When HP saw its fortunes crumble under the leadership of Carly Fiorina -- its first leader that didn’t come from an engineering background -- it brought in Mark Hurd to right the ship, only to see him depart following a high-profile sexual harassment scandal. And then came the short-lived, and disastrous tenure of Leo Apotheker. That brings us to Meg Whitman, who took over as CEO in September 2011. Four years into her reign at the top, HP is today breaking up into two separate companies: HP Inc. and HP Enterprise (HPE).

“We’re leaving behind a company that was very large, running two businesses that were very different,” said Whitman in a recent interview. “We’re creating two new big companies, not bite-sized morsels, with real capabilities to change things.” Besides leaving behind a company that has fallen behind its competitors in the rapidly-changing tech industry, Whitman and company are throwing 30,000 employees overboard — 10 percent of its global workforce — as a result of job cuts that were announced in September.

HP’s PC and printer division will become HP Inc. and will be lead by Dion Weisler as President and CEO. When the announcement of the split was first made over a year ago on October 6, 2014, it was stated that HP Inc.’s mission is to “[deliver] innovations that will empower people to create, interact and inspire like never before.”

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HP Inc. President and CEO Dion Weisler

One year later, that mission statement has not changed, with Weisler stating in a press release today, “In an ever-changing, connected world, HP Inc. will keep reinventing itself, its technologies and what tomorrow holds, so industries, communities and individuals can keep reinventing how they operate, ideate and create what matters the most to them.

“We intend to amaze through the people we hire, the technology we create, the experiences we enable and the way we treat our customers and each other.”

Weisler will have nearly 50,000 employees under his command along with the company’s storied 76-year legacy to pull from. HP Inc. will continue to be a dominant force in the PC and printing sectors, but the company still hasn’t done much to advance its mobile efforts — specifically, the smartphone sector. We understand that HP is probably a bit gun shy following its messy acquisition and subsequent abandonment of Palm, but it’s sad to see a company that was once a big purveyor of PDAs (does anyone remember the iPaq?) that gave rise to smartphones isn’t that interested in making its mark once again.

On the other front, HPE will become a “simpler, more nimble partner” for its customers that aims to “take full advantage of the opportunities presented by cloud, big data, security and mobility in the New Style of IT.” Current HP CEO Meg Whitman will helm HP Enterprise.

HPE hopes to stay at the forefront enterprise software and services, and plans to invest roughly $100 million per year into startup companies to help foster new technologies that it can use to advance its operations.

"We're turning around an icon ... that lost its way," said Whitman. "We're trying to set the company up for the next chapter by laying the pipes and remodeling the house."

Interestingly enough, HP is splitting into two companies at a time when long-time competitor Dell is merging to become a top-to-bottom tech powerhouse. The two strategies couldn’t be more different. Whereas HP sees splitting into two companies as a way to stay lean and make quicker decisions, Michael Dell and his merry band of investors dropped a record $67 billion to acquire EMC in mid-October. This provides Dell with an in-house team that can provide a one-stop-shop for its customers “across servers, storage, virtualization and the next era of converged infrastructure.”

It remains to be seen which strategy will work out in the end, but we’ll be watching intently from the sidelines with popcorn in hand.