Hewlett-Packard has officially split into two companies--one focused on PCs and printers called HP Inc. and Hewlett Packard Enterprise. Will either company be able to grow and transform their own operations as well as customers?
The argument is that splitting HP will result in two nimble companies that can change the computing game. The reality is that both companies may be challenged to grow.
Hewlett Packard Enterprise's site (HPE) notes that "tomorrow belongs to the fast." HP Inc. simply says welcome to the new HP. The reality is that little has changed so far. The storylines go like this:
What's unclear is whether the split provides much benefit going forward. Meanwhile, the former Hewlett-Packard has split into two parts when other companies such as Dell and EMC are merging for scale. All tech giants--IBM, HP, Dell, Oracle and Cisco--are going through some transition due to mergers, business shifts and leadership changes. HP Inc. and HPE will be worth watching closely.
More: Trend Micro acquires HP's TippingPoint security team in $300 million deal | HP Enterprise's Whitman pans Dell's EMC purchase over debt | HP board sets corporate split for Nov. 1; HP Enterprise trades Nov. 2 | HP Inc.'s future growth rides on 3D printing inroads | HP Enterprise: Can it overcome layoffs, split growing pains, and FUD?
FBR analyst Daniel Ives said in a research note:
The IT spending environment is becoming a bipolar landscape. While fertile areas such as big data analytics, cloud computing, and cybersecurity have been white-hot and have been growing more than 30%-40% per year, traditional hardware, services, and implementations in the datacenter have been in quicksand mode, with many segments seeing flat to declining growth prospects. We view 2016 as a pivotal year for some of the once-dominating tech stalwarts to prove that a turnaround could be in the cards despite Everest-like growth challenges. In different ways, all these tech behemoths are trying to go after the $100 billion-plus next-generation datacenter pie and put fuel back in their growth engines, a task that seems much easier said than done.
Some analysts question whether HP Inc. and HPE can grow much beyond gross domestic product in the United States. These questions are valid. In fact, HPE and HP Inc. face nothing but questions. Here are a few: