Decoded: The Biggest Breakup of 2014? Hewlett-Packard to split in two.

Big names break up all the time. Normally the result though, is not two new Fortune 500 companies. And normally a breakup requires two people. Hewlett-Packered is breaking up with itself.


Hewlett-Packard, better known as HP is one of the leaders in consumer and enterprise computing. You probably know them for their laptops, computers, and printers, but they also make servers and other hardware for large companies.

How is this going to work?

By the end of 2015, Hewlett-Packard will become two companies. One of them will be what HP is doing now for large corporations, and be called Hewlett-Packard Enterprise. The other will be the laptops, desktops, and printers that you are used to seeing. That company will be called HP Inc.

Why is HP splitting in two?

In a lot of ways HP has been operating as two companies for some time. Consumers (that’s you!) and large companies (read as Fulton County Schools) have different needs, and product solutions that work well for one group, don’t work as well for, and can even hurt, the other. (For example, you don’t need to access every student account on your personal computer.) So, HP has been trying to meet the demand of two different types of customers. In the press release announcing the split, HP says that splitting will allow the two separate companies to focus on just one type of customer (large companies for Hewlett-Packard Enterprise, and the end user for HP inc). Because the enterprise computing solutions are more of a long term investment, they have not been influenced by the changing landscape of the personal computing industry (In other words, the enterprise devision hasn’t had to compete with the iPhone and iPad, so it is still going strong).

“In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value”
 –  Meg Whitman, HP President and CEO

Does this happen a lot?

Yes and no. It is easily to forget that the personal computing industry is still only thirty years old, and so the dust is still settling. That being said, IBM spun off its pc devision (acquired by Lenovo). Motorola split into Motorola Solutions and Motorola Mobility (acquired by Google, then sold to Lenovo). And Nokia sold its hardware division to Microsoft. Dell’s CEO, Michael Dell, was not impressed however claiming that “There’s chaos in trying to separate two large entities like that.” Dell went on to emphasize his company’s end-to-end solutions.

“There’s chaos in trying to separate two large entities like that.”
–  Michael Dell, CEO of Dell

How does this change impact me as a student?

Well, considering Fulton County Schools has had a (long standing)[] contract with Dell for computers inside the school system, the only way this change should impact you directly is if you are planing to buy a new computer in the next few years. And even then it should take a while for the reorganization to have reach customers. Most of the enterprise work HP does now, doesn’t directly impact end users. For example HP has been managing the backend for (GM)[], and the (US Government)[] for years, and you have had no reason to notice. So, in short the deal might mean some cool new stuff from HP in the future (they talked about 3D-printers in the release), but nothing immediately.

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