Hewlett Packard finalizes business split

Posted on 11 Nov 2015 by Michael Cruickshank

Electronics manufacturer and services provider Hewlett Packard (HP) has completed a split in its core business.

From the beginning of this month onward, the company is now officially split into two publicly-traded entities – HP Inc. and Hewlett Packard Enterprise (HPE).

Following the split HP Inc. will continue the production of HP-branded electronics such as computers and printers.

Meanwhile, HPE will take over the services side of the business, including commercial computer systems, software and support.

The former company, which was more than 75 years old, had seen a significant fall from grace over the past decade.

While previously one of the market leaders in computing, the company failed to predict the rise of mobile devices, severely hurting its bottom line.

Furthermore, it was outmaneuvered by long-standing competitors such as Microsoft and Apple, as well as new players like Google.

Both parts of the now-divided HP hope that as separate business entities they can become more agile and able to compete in a rapidly-changing marketplace.

“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,” said Dion Weisler, CEO of HP Inc. in a statement.

HP Inc. identified the lucrative printer market as one where it can continue to dominate, as well as provide new 3D printing products.

HPE, on the other hand, has talked up its cloud infrastructure catering to new data-driven businesses in an interview with Financial Post.

“Our strategy is simple […] to provide IT solutions for the new style of business. CIOs of the future have to become value creators, and also make traditional IT more effective,” said Antonio Neri, EVP and GM, Enterprise Group, HPE.

In the week following the split, investors appear to have decided HP Inc. to be the more promising of the two companies.

Its stock has risen close to 10% from its initial price, while HPE’s has seen a decline of more than 5%.