Relevant parts of the article, since it's paywalled:
> 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.
so they bought EDS, turned HP into IBM services (cheap, outsourced shit), and now they spin it off again. makes sense, EDS employees still have their old personnel numbers. plus they never consolidated their ERP systems.
the full blown write-off of the 11bn of autonomy is in there as well.
The most amazing thing for me of the piece is the realization that HP still had $110B+ in revenue last year - its a useful reminder to us (put myself squarely in this category) of some of the behemoths in the valley that get short shift at times in the "Silicon Valley" PR ecosystem. There's apparently some interesting research still going in HP labs - one smart friend moved out here to work on Memristors with them (over multiple alternatives), because they had backed the work for a while.
If you get out of the VC/Silicon Valley/Tech universe these companies are appreciated much more. In the wider business world, they still get a lot of attention, largely because they are good businesses despite not having the sex appeal that smaller, but quickly growing companies might have.
Might you know what HP's current stance on memristor research is, by any chance? It's one of those technologies we've all seen simmering away hopefully, and HP's been (or, perhaps, was?) one of the few large SV corporations with an interest in longer-term R&D.
I actually liked when they had Compaq as their low-end brand and HP as their high-end. They should bring that back. It works for car companies. Right now HP sabotages their own brand name with their cheap low-end crap, even though they make some good devices.
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.
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.
It really bothers me what has been been done to HP as an engine of innovation and product development. It's extremely similar to what the leadership at IBM has done to that company the last ~15 years.
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)
And that's why we must understand that at executive level gender does not matter. What matters is strategy and ability to execute. When HP announced "Meg Whitman" as CEO everyone was so voraciously attacking how HP is is being in bad condition because of male CEOs.
Being male does not matter. Whitman has failed tremendously. Not only HP has laid off thousands of people from US ( some of them I knew personally very well ) and increased offshoring in India and Philippines but also they now seriously lack true culture of invention.
I studied APM at Stanford and HP case study was presented repeatedly as how it went from Inventor's Org. to control structured Org.
I was recruiting at major ( top 20 ) universities and from many places I got feedback that young people deliberately avoid joining HP. Those who have left in HP are in survival mode and always worrying if they are next in round of layoffs.
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.
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.
Not sure. A lot of the success of Samsung in the smartphone market is due to vertical integration. They save around 10-15% of bill-of-materials cost reduction due to this, they sometimes have unique components(like being first with HD-oled display), they have more control over manufacturers(as a condition for using a Qualcomm processor, they wanted the processor to be made at a Samsung fab), They are less exposed to tight supply in components like ram/flash, And who knows what other benefits they have due to this.
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.
2 years ago I said One of HPs many personalities wants to be IBM. Another step along that path (of course, it makes sense to not bother too much with consumer computer stuff when Apple is dominating the high margin side and everyone else is looking for ways to lose money).
Can we please have a rule against posting paywall links? I know we can find a cached version or search on Google or whatever, but it's still frustrating!
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 have a rule against posting paywall links?
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.
WSJ is an exception - you can always google the title to get a free copy. Also - they broke the news a good 2+ hours before any other sites - so they were the only source.
The argument against unbundling a couple years ago was that the server/desktop divisions were able to leverage the volume they purchased hardware on, and the obvious synergy in having the desktops/printers open up a channel for servers and software services. Not to mention the value in having a single sales, finances, sales, ordering, procurement, manufacturing division.
I'm wondering if this argument has changed? Looking very forward to hearing what the rationale is.
Can somebody enlighten me on where HP's high-end server business is going in the long run?
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?
Reminds me of how during the last bubble, HP spun of its unsexy device and medical equipment making divisions (as Agilent) in order to recast itself to the public markets as a sexy Internet company.
> 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)
I have been an HP customer for about 30 years. I have purchased test instruments, calculators, printers and computers from the company. Some of these products are still with me. For example, my collection of HP calculators starting with several HP-41's up to the current HP Prime. Even a 30 year old HP-41 works and feels as when it was new. Also a range of digital voltmeters, signal generators and scopes. With minor maintenance (replace dried electrolytic caps) good as new.
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."
I'm excited I think this break up will be revealing in the mid term showing the insane revenue declines in personal computers and printers( still profitable though) , and then showing how little revenue is actually flowing through enterprise business, but how fast it is growing.
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.
Also worth noting is that Ebay has just recently announced a split (splitting Ebay and PayPal), and many are suggesting that Cisco split into two businesses as well.
[+] [-] gergles|11 years ago|reply
> 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.
[+] [-] lstamour|11 years ago|reply
[+] [-] pinaceae|11 years ago|reply
the full blown write-off of the 11bn of autonomy is in there as well.
[+] [-] judk|11 years ago|reply
[+] [-] crapshoot101|11 years ago|reply
[+] [-] jeffreyrogers|11 years ago|reply
[+] [-] porsupah|11 years ago|reply
[+] [-] radmuzom|11 years ago|reply
[+] [-] randomafrican|11 years ago|reply
And many would argue that it'd be hard to do better.
[+] [-] otterley|11 years ago|reply
[+] [-] ben1040|11 years ago|reply
[+] [-] lallysingh|11 years ago|reply
[+] [-] Pxtl|11 years ago|reply
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.
[+] [-] Tomte|11 years ago|reply
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."
[+] [-] unknown|11 years ago|reply
[deleted]
[+] [-] tonyplee|11 years ago|reply
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.
[+] [-] joezydeco|11 years ago|reply
http://www.agilent.com/about/companyinfo/company-separation....
[+] [-] adventured|11 years ago|reply
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)
[+] [-] kqland|11 years ago|reply
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.
[+] [-] shepard|11 years ago|reply
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.
[+] [-] pinkyand|11 years ago|reply
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.
[+] [-] maxerickson|11 years ago|reply
https://news.ycombinator.com/item?id=4808974
[+] [-] namityadav|11 years ago|reply
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.
[+] [-] dctoedt|11 years ago|reply
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.
[+] [-] ghshephard|11 years ago|reply
[+] [-] q2|11 years ago|reply
http://en.wikipedia.org/wiki/L%C3%A9o_Apotheker#Hewlett-Pack...
[+] [-] wittekm|11 years ago|reply
* 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.
[+] [-] ghshephard|11 years ago|reply
I'm wondering if this argument has changed? Looking very forward to hearing what the rationale is.
[+] [-] krylon|11 years ago|reply
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?
[+] [-] jgalt212|11 years ago|reply
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...
[+] [-] dannynemer|11 years ago|reply
[+] [-] Ricapar|11 years ago|reply
[+] [-] robomartin|11 years ago|reply
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.
[+] [-] walterbell|11 years ago|reply
[+] [-] nandhp|11 years ago|reply
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
[+] [-] CaveTech|11 years ago|reply
[+] [-] tenpoundhammer|11 years ago|reply
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.
[+] [-] jeffreyrogers|11 years ago|reply
[+] [-] kordless|11 years ago|reply
[+] [-] teddyh|11 years ago|reply
http://www.icanbarelydraw.com/comic/365
[+] [-] raspasov|11 years ago|reply