Hewlett-Packard announced their plans to split the 75 year old company in half Monday morning. One half of the company will be comprised of Hewlett-Packard Enterprise, selling computer servers, data-storage, software, and other services. The other half, HP Inc., will consist of the PC and printer business side of things.
The split seems to be a strategic move by HP to reverse a downturn in sales. The move also comes in the fourth year of a five year recovery plan implemented when Meg Whitman took the position of CEO in 2011. The plan was created to restore HP’s position as king in the PC Market. According to Forbes, HP’s total 2013 revenue of $112.3 billion has been down 7% year over year. The PC market has been in a steady decline with the growing business of mobile computing, and this move by HP could breathe life into the market, according to some experts. Beau Skonieczny (via Fox News), analyst for Technology Business Research, believes the move is positive and will help drive new innovation. This new innovation could be in the form of 3D printing and new computing experiences that would be elements of HP Inc., as mentioned in HP’s original statement to the press.
The division has certainly been good news to shareholders. As of Monday evening after the announcement, HP’s stock had risen 4.7%. The transaction is scheduled to be completed by the end of the 2015 fiscal year, and HP shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc. The transaction will be tax-free for shareholders for federal income tax purposes, according to HP.
ServerMonkey will keep a close eye on the future of the HP split and report significant news as they are released by HP. Tell us what you think of the split in the comments section!
