HP Split: What Will it Mean for Cloud Strategy?
Breaking up is hard to do—or so the song goes. But Hewlett-Packard is going to give it the ol' college try, anyway.
Breaking up is hard to do—or so the song goes. But Hewlett-Packard (HPQ) is going to give it the ol’ college try, anyway. The company announced this week it was intending to split itself into two separate companies, with one focusing on the dwindling PC and printer products business while the other sets its sights on loftier business related to enterprise and services, including the cloud.
Like the old married couple that suddenly separates, it’s a bit of a surprise the one will soon become two. But the companies (maybe called Hewlett and Packard, respectively? Okay, maybe not) will each have their own roles, and it could be a boon for the enterprise business. After all, PCs and printers aren’t exactly the booming businesses they once were. But the enterprise services, in particular the cloud, is like the Gold Rush all over again.
Let’s focus on the enterprise/cloud side here (but I promise: no more lousy metaphors). Ridding itself of PCs and printers, but keeping leadership talent the likes of HP CEO Meg Whitman could be a significant boost to HP’s cloud strategy and its market focus.
“Regarding the effect of HP’s plan on its cloud efforts and strategy, I would expect to see a sharpening of focus and, perhaps, additional investments around its Helion portfolio,” said Charles King, principal analyst at Pund-IT, told Talkin’ Cloud. “Though cloud has become an essential focal point for HP’s data center organization, you could argue that the struggles of its lower margin PC and printer groups have been something of a distraction. Add in the fact that the new enterprise organization will be led by Meg Whitman, who has a lot riding on its success, and it seems likely that the cloud effort will get whatever investments and tools are required to accomplish its goals.”
Will that be enough for HP to narrow the gap? After all, it has some distance to cover to catch up to many of its top competitors in the cloud.
With the right investments, sure, it’s possible, but it seems unlikely HP is going to catch the likes of Amazon Web Services (AWS) or Microsoft Azure (MSFT). It has a lot of smaller competitors to take on before it can hope to reach that level of success. And HP was a little late to the game, so many of its competitors have a head start.