The PC stands alone as HP splits into two companies

HP will break off into two separate companies, but does IT stand to benefit from a refocused approach to PC sales?

As HP breaks into two separate companies, enterprise PC buyers are left to wonder whether its refocused approach will pay off.

One of the new companies, HP Inc., will sell PCs and printers. The other, Hewlett-Packard Enterprise, will focus on servers, converged systems, services, software and the cloud. Analysts do not expect the restructuring to significantly affect enterprise PC purchasing, at least in the short term.

“The reality is that inside most enterprise customers, PC [and] printer purchases are made by different people than [those who buy] enterprise infrastructure, software and services,” said Patrick Moorhead, president and founder of Moor Insights and Strategy, an analyst firm in Austin, Texas.

Industry reaction 

HP had struggled to remain a cohesive entity recently, especially after its Autonomy acquisition in 2011 and subsequent long-term corporate restructuring. As part of this new split, the two companies intend to lay off an additional 5,000 workers, bringing the total to 55,000 this year. 

“Internally, the left hand never talked to the right hand,” said Steve Brasen, managing research director at Enterprise Management Associates, an analyst firm in Boulder, Colo. “There was never an integration between the PCs and printer division and what was going on elsewhere. The only surprise here is they took so long.” 

For some observers, HP's split should have come a long time ago. 

“It’s time they stopped dividing the focus,” said Brian Katz, director of mobile innovation at a large pharmaceutical company based in New Jersey.  

But for others, the move goes against HP's history as a one-stop shop for all enterprise needs, from the back-end infrastructure to the endpoint. 

“The thing that strikes me odd is that I feel they were trying to bring the two together,” said Bob O’Donnell, founder and chief analyst at TECHnalysis Research LLC in Foster City, Calif. “There’s a huge amount of value in having a combined story. ... That part has me scratching my head.” 

Challenges ahead 

Like other major PC vendors today, HP Inc. must contend with mobile devices eating away at the market

“How does HP continue to compete in a marketplace that is becoming more mobile-savvy?” said Tim Bajarin, founder of Creative Strategies Inc. in San Jose, Calif. 

PC replacement cycles have helped stabilize the market somewhat, however. Worldwide shipments of PCs are expected to decline 3.7% in 2014 -- less than the previously forecast 6%, according to IDC.

For more on HP's split into two companies, and whether lower server prices are on the horizon, click here

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