Hewlett-Packard Plans to Break in Two
online.wsj.com
online.wsj.com
> Hewlett-Packard Co. HPQ +2.00% plans to break in two, separating its personal-computer and printer businesses from its corporate hardware and services operations, according to people familiar with the matter.
> The company plans to announce the move as early as Monday, the people said. It is expected to be effected as a tax-free distribution of shares to the company’s stockholders next year, one of the people said.
> The move is one H-P and its investors and analysts have long contemplated. It would come amid a wave of breakups and spinoffs at technology companies and in the wider corporate world, underpinned by the idea that companies with a narrower focus perform better. The moves in many cases have been well-received by shareholders—if not actively sought by them.
> Ms. Whitman will be chairman of the PC and printer business and CEO of the separate, so-called enterprise company, one of the people said. Current lead independent director Patricia Russo will be chairman of the enterprise company, while Dion Weisler, an executive in the PC and printer operation, is to be CEO of that business, this person said.
> In fiscal 2013, the printing and personal systems group, as it is known, inked $55.9 billion in revenue, about half the Palo Alto, Calif., company’s total. Sales for the operation dropped 7.1% amid fierce competition, compared with a 6.7% decline for the company as a whole.
> Last year, H-P lost its place as the largest PC maker by shipments, slipping to No. 2 behind China’s Lenovo Group Ltd, according to industry research firm IDC.
the full blown write-off of the 11bn of autonomy is in there as well.
http://arstechnica.com/information-technology/2014/06/hp-lab...
And many would argue that it'd be hard to do better.
He's an enterprise-level field-service tech. He's the go-to guy for most HPs largest clients in Minnesota (UHG, USPS, 3M, UMN all come to mind), and in the Upper-Midwest.
He's always said that DEC did the most incredible stuff out of all the generations of hardware he's seen.
There's a brilliant scene in DEC history where the chip guys had to explain to the board that their latest ceramic thing with legs cost $30 in quantity, and it outperformed the top-line million-dollar ECL-based room-filling VAX product.
But DEC were always B2B and B2A (Business to Academia). They never got B2C at all, which is sad for everyone.
I want to ser a win/android compete with apple properly - a well-defined and short list of mid-to-high skus and no cheap stuff to apologize for.
Maybe that only applied to consumer hardware? The used the Compaq name for their business hardware, including servers, for a long time IIRC.
So they split up. Agilent was born.
Shortly after that a new CEO believed, HP needed to be bigger. So they bought Compaq.
Now they are too big again.
"All of this has happened before. And all of it will happen again."
At that time, I remember old HP (mainly instrumentation groups now Algilent) had a rule of if a product line is > $100mil. They will spin it off to a separate P/L division. It seems like a good sharding algorithm for scaling out a corporation.
They stopped doing it after PC/Printer div/group. A cynical view was it was good for high level corp managers to hide the cost of fleet of corporate jets into the billions $ revenues with almost no profits.
http://www.agilent.com/about/companyinfo/company-separation....
I feel like the destiny for both of these companies is to slowly be split into ever smaller pieces until half of those pieces are eventually acquired by other US or Chinese firms for dirt cheap (and nothing against Chinese firms, rather, they'll find value in what IBM / HP are throwing away through negligence).
Profit milking, EPS goosing, bad acquisitions, and financial engineering are all the leaders at HP and IBM seem to know how to do. The MBAs took over engineering cultures, and this is the result. (contrasted with actually creating new products the market wants and generating new profit streams and new growth)
So when feminists advocates claim that female CEOs are better than male CEO answer is simply NO. At highest level you want someone who can not only steer the ship but take everyone along with you without loosing them.
If I was major investor in HP, first thing I would ask is Whitman be removed from CEO position. Get new energy in. Since cultural changes don't happen overnight implement strategies to go from Operational ( Control ) based Organization to Inventor's Org.
I will certainly not consider next CEO based on gender and would not bring someone in just because she has vagina.
PS - Sorry if this came as too bold but I could not resist myself.
When Carly Fiorina was ousted from the company she wrote a book all about how she was despised at HP for being a woman in charge of a major engineering firm. But being a woman had nothing to do with it; being an idiot who didn't understand engineering culture and who damn well nearly broke the company had everything to do with it. Steve Ballmer was ousted from Microsoft for similar reasons.
I don't know the facts of Fiorina's experience but from what I understand discrimination against women in tech is well-documented and very widespread today. It would be surprising if Fiorina were not subject to it back when she ran HP, from 1999 to 2005.
No need to apologize, and the problem isn't boldness but what I think is a lack of factual basis and a bit of a rant:
1) I haven't seen anyone, including feminists, claim that female CEOs are better and certainly not that they are necessarily good managers (I'm sure you can find someone to back any statement, but it's certainly a very small minority).
2) You imply Whitman was chosen to run HP because of her gender Do you have evidence? At least she has a very impressive resume and is fully qualified. EDIT: And you imply that people with the opinion in #1 caused that to happen; it's very hard to believe that is true or that they even have the influence to affect the choice of HP's CEO.
3) The necessary assumptions behind #1 and #2 make your statement read as if you believe there is some sort of conspiracy favoring women in tech and you are pushing against it. I'm not saying you believe that, but the argument looks that way.
If there is a conspiracy to promote women in tech, it is doing very poorly.
I agree with this statement: Cultural changes don't happen overnight.
Sad but true.
So that addresses your question #1.
#2. You are twisting the words. I said when "When HP announced "Meg Whitman" as CEO everyone was so voraciously attacking how HP is is being in bad condition because of male CEOs". It is not same thing as saying Whitman was chosen because of her gender. My point still stands though. In her tenure of last three years she has failed to turn around HP from lost focus despite whatever claim you see. Here is latest news on more layoffs from May [1] So she is doing no wonder than some male in same position being as CEO.
#3. I don't know about conspiracies and I would never see myself assimilate with one. But, here is thing I can tell you. Circle of powerful people do definitely want more women in powerful position. HP, Yahoo, IBM, Oracle( recently ) on and on. I don't know if these efforts are to get more women in tech industry or something else but there are sustained efforts across US for sure.
Regarding your claim "few women in tech industry " is blatantly false. I worked for four Org. on east coast. 8 out of 10 IT managers are women. 7 out of 10 women in mid to senior level mangagement up to VP.
This is not case of any one company , rather I would say there are more women in management than men.
I don't form my opinion from sustained campaigns run by someone and I certainly look far beyond San Francisco hypocrites.
[0] https://www.google.com/#q=woman%2B+ceo%2Bbetter%2B+than%2B+m...
[1] http://www.nbcnews.com/business/business-news/hp-plans-more-...
There was a reason for conglomerates in 1960-70s: shortage of capital meant that cross-subsidizing one division by another was the only viable way to finance growth. These days are long over.
Nowadays, it makes much more sense to operate unrelated businesses as completely independent companies, with different set of managers and investors.
Those advantages are a big reason to why they have better access to carriers - meaning much better marketing - and the reason behind their ability to push volumes, create brands, and manufacture so many variants to compete better than others.
In the early 90's when I was just starting out in IT, their brand was very highly regarded, especially their laser printers which phenomenal workhorses.
- vertical integration (and tighter control over quality / schedules) for technology companies, and
- size/scale as an advantage in Marketplace.
We have seeing both of these in play, not just with Samsung: Apple is designing their own CPUs, and you can argue they leverage their size to help iTunes and Apple Pay businesses.
Still, there are counterexamples: NVIDIA (and many other successful companies) are fabless, and AMD divested their fabs (by splitting into AMD and Global Foundries).
What HP seem to be spinning off is their consulting arm and the enterprise hardware businesses, where vertical integration/size doesn't matter that much.
A conglomerate like HP and Samsung often has little to no cross-pollination between divisions. Obviously the semiconductor part of Samsung can benefit the whole business, but the intersection between TV and dishwasher is probably zero, even at marketing level (they have totally different marketing and sales departments).
I am not asking for a work-around to access WSJ articles. I'm asking HN to consider blocking domains that force users to pay money to access their content.
Can we please stop already with the complaints about paywalls? Diligent, thoughtful journalism doesn't happen for free; it's great when HN links can be read for free, but paywalled links shouldn't be second-class citizens.
Paywalls might arguably break Hacker News (although that's debatable) but they certainly do not break search engines. The job of a search engine is to index all content. It makes no guarantee that you will not have to pay for the content it indexes. It only claims that the content it finds is relevant to your search.
A free to use website (with ads) doesn't mean the journalists aren't payed. Most of the time, they are.
Generally, there's nothing wrong with payed websites, but it makes it a bit frustrating for people at a discussion board for web articles. Especially when there are users who really can't afford them (from countries with less income than North America or Europe) and the same information is available on free to use websites.
http://en.wikipedia.org/wiki/L%C3%A9o_Apotheker#Hewlett-Pack...
* to kill off / sell off the consumer division
* to just turn HP into an IBM-type enterprise company.
The former isn't exactly true in this case; the latter is coming true.
I'm wondering if this argument has changed? Looking very forward to hearing what the rationale is.
I read recently that they announced they would stop developing VMS in about 2020 and sold the VMS business off to some other company (which in turn might port VMS to x86_64 eventually). So at the high end, what remains after killing off HPPA, the Alpha, Tru64?
HP-UX and NonStop on Itanium? I am not being sarcastic, I am seriously asking. My impression so far is that Itanium is either slowly going down (Microsoft and Red Hat stopped porting their systems to IA64 a couple of years back) or simply replacing what HPPA used to be - but in that case it would appear they burnt a whole lot of money for nothing, except that now they are depending on an outside vendor. And Intel, as far as I can tell, does not seem to like Itanium too much, HP seems to be the only company buying them in substantial numbers, and there were already rumors Intel would cease development of IA64.
So where is all this going? Would it make sense for HP to buy the Itanium from Intel and continue developing and building them on their own? Could they pull it off as far as engineering and manufacturing go? Would it make sense to port HP-UX and NonStop to some other architecture?
http://en.wikipedia.org/wiki/Agilent_Technologies
> In 1999, product lines not directly connected with computers, storage, and imaging were grouped into a separate company (Agilent), the stock of which was offered to the public in an initial public offering. The Agilent IPO may have been the largest in the history of Silicon Valley at the time.
Since 11/26/99, HPQ is -24% and A is +40% (both pretty lame 14Y returns)
http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&c...
HP used to stand for uncompromising quality. At least that was the theory. I've owned a range of HP printers, tarting with the original LaserJet, up to the LaserJet IV and a pile of ink jets.
As I said, I also owned a range of computers, mostly a pile of laptops and probably one desktop (the only factory assembled desktop I have ever purchased).
After a while I think I was buying HP out of habit. I say this because their quality has consistently disappointed for the last, say, 15 to 20 years. They went from, to borrow from Mercedes, "The best or nothing" to seemingly building some of the worst crap out there.
Their calculators went from superb to crappy displays and even crappier keyboards. Their printers might work OK but the software and drivers have been horrific for years. On the computer front, I used to buy laptops by the dozen for my business but stopped because of simultaneus failures after N years of use. In contrast, products from companies like Acer and Asus keep on ticking through thick and thin.
To address the split. I hope this means returning to some of HP's roots when it comes to design, quality and superior performance. If that isn't one of the objectives they are going from one "me too" company to multiple "me too" companies. Next year we are already planning to toss out some of our HP printers and laptops in favor of other brands. They no longer stand for what, ultimately, were the reasons to remain loyal customers.
I learned about the HP-12C today, which appears to be the TI-83 of finance: "The HP-12C is HP's longest and best-selling product, in continual production since its introduction in 1981" ... "In 2008, HP modified the design so that new production runs contain an ARM processor which runs an emulated version of previous chips."
http://www.hp.com/calculators/ http://store.hp.com/webapp/wcs/stores/servlet/PDPStdView?cat... https://en.wikipedia.org/wiki/HP-12C
I myself was a follower and had an HP 50G (Nice 205MHz ARM RPL machine, successor of the HP48 series). Was totally unusable without the manual which was in PDF format only so I'd have to sit at the computer anyway. I couldn't print it out because the three volumes were ~2000 pages. Plus the thing was so damn obtuse and totally non discoverable.
Then they released the Prime which is a buggy turd of a calculator wrapped in a very polished case.
Ended up with an old TI89 I paid £25 for on ebay that came with the manual which isn't a million pages long.
This is the best thing on the market at the moment in the same form factor: http://www.edu.casio.com/products/Calculators_%26_Dictionari...
If you want programmable then there's (but you have to import it): http://www.casio-intl.com/asia-mea/en/calc/scientific/progra...
TI89 for me though.
That could be an interesting HN or blog post if you wanted to do it. I'm a bit of a calculator fan myself, though I haven't used many different models. There's something about physical products, even though virtual ones are more flexible / configurable, being software.
It's been a long time HP strategy to use the revenue in device sales and the growth in the enterprise to keep the stock prices strong. If you break those two up you show two businesses with big upsides and big downsides.
Should be interesting to see how the markets react to the separated numbers.
I wonder why HP toke a different approach, no buyer, no immediate need for cash or something else?
I'd go with the 'other' category. Either buyers won't offer what they think it's worth, or they liked the synergy with printers (and now they get to spin off both simultaneously).
I used to enjoy HP printers and HP-UX was the only commercial UNIX I ended up using across multiple employers.
HP also had some good Unix tools that were only on HP-UX, AFAIK. Ignite-UX was one of them. It allowed you to set up a configured OS (base OS + kernel parameter customization, patches, etc., init and shell scripts) and then image it onto multiple other machines very easily. Had a real need for such a tool, googled and found it on an HP site. Then installed and used it. The work went like a breeze. I guess there may be tools like that nowadays for Linux and other UNIX-like OSes.
Yes, sad to see this happening to HP. Many years back they had really solid products and tech, and I've read that they were called "the engineers' engineers." I worked in a company that had a joint venture with HP for a while, so saw some of that first-hand.
(HP employee)