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Can HP Make a Comeback?

Next month HP is expected to reveal a new PC product line up aimed at the commercial market, a little over a month after it split the company in two.

But questions still remain as to whether the move will succeed in getting itself on track with its hardware business and address the gaping holes in its mobile strategy with Hewlett-Packard Enterprise.

Longtime high-tech industry observers wondered why it took HP so long to do the split.

“It was overdue,” said Rob Enderle, principal analyst for the Enderle Group, based in San Jose, Calif. “The two halves of the company have been pretty separate for some time.” As separated partners, both companies should become more agile, he said.

It’s a model that companies like IBM started to follow a while ago. For example, IBM sold off its hardware business to Lenovo, allowing them to focus solely on the enterprise with its software and services business. IBM also aligned itself with Apple with a far reaching enterprise alliance to benefit both companies.

But on the flip side, there’s a danger in splitting the company in two. There’s nothing so far that says HP Enterprise is required to sell HP Inc.’s hardware when they sell to customers.

Indeed, what’s to stop HP Enterprise from selling a Lenovo or Dell PC for that matter?

“In this model, it’s unclear how [the two entities] will work together,” said Tim Bajarin, a long-time industry analyst and founder of Creative Strategies Inc., based in San Jose, Calif. “Does the enterprise group support a 2000 PC sale? Will the PC business be able to innovate on their own? Where does HP Labs fit in all of this? While I understand the reasoning and the goals there’s too many outstanding questions that makes it hard to determine whether it will be successful.”

What’s the mobile story?
While the industry contemplates HP’s, it seems like the company is beginning to fill in the gaps of a cohesive mobile strategy. With new 2-in-1s coming down the pike and a recent partnership with VMware, HP could be on track for the future.

In fact, the HP-VMware deal is a strategic move that could plug the hole from the lack of an enterprise mobile management platform strategy. But, the partnership may be confusing too.

“It’s a good offering and reflective of where the companies need to go [for] management services,” says Bob O’Donnell, chief analyst and founder of TECHnalysis Research LLC, FosterCity, Calif. “[However] If I’m from HP Inc. … part of what I want to offer is the software and services. If [I was a customer] and wanted services I could go straight to VMware whereas [before] I was going to HP because I wanted the hardware piece and services to be bundled along with it.”

Other analysts agree.

This is a good example of large organizations selling anything they can get their hands on, says Chris Hazelton, research director, enterprise mobility, for 451 Research, in Boston. Before, HP didn’t list enterprise mobility management as part of its mobile offering, which was a mistake, he adds.

For its part, Hazelton calls the deal between HP and VMware a big win for VMware and Airwatch.

“The idea is to create a one-stop shop for mobility and that’s what these system integrators, app developers and ERP vendors are jumping on this door opener to the mobile enterprise,” he says. “One manages mobile devices, another manages the user data and together [they] start building the ecosystem for apps and services. That’s where HP is going to provide value.”

And with that, here’s hoping HP’s new strategy and its new commercial PC offerings is enough to begin plugging in the gaps.

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