HP's Future: A Little Less Confusing - The UpStream

HP's Future: A Little Less Confusing

posted Saturday Oct 29, 2011 by Scott Ertz

HP's Future: A Little Less Confusing

I have a theory: HP and Netflix are actually the same company. Let me explain. Netflix has had some problems lately. First, they raised prices, then announced that they would spin off DVDs to a new company. A lot of backlash and the company undid some of its decisions. Reversing direction, however, did not prevent a loss of customers.

HP has been in a very similar boat. First, they announced intentions to spin-off their hardware division, as well as discontinuing webOS hardware. After a lot of backlash from customers and investors, they replaced their CEO, but new CEO Meg Whitman said she would stay the course. This week, HP announced that they had decided not to spin-off their hardware division, claiming it to be too expensive to accomplish. This reversal, however, might be too little too late for consumers who are concerned about the longevity of the company.

What are the plans for the hardware division and webOS? Find out after the break, along with an interview with Todd Bradley, HP's Personal Systems Group Executive Vice President and the full press release.

According to Meg Whitman, who has the unfortunate task of reevaluating former CEO Leo Apotheker's business plans,

It's clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees.

HP's computers were not the only technology whose future was unknown. HP's acquired webOS was also unknown. In an interview with Todd Bradley, HP's executive who would have become the CEO of the spun-off division, it was discovered that webOS being closed up was an unfounded rumor and that HP is currently evaluating the position of webOS and where best to utilize the resources. That is good news for those of us who have had webOS devices since launch (and webOS devices that were never released to the public). Hopefully they will find a partner (Amazon, Facebook) to re-position webOS as a viable platform.

All of this conjecturing aside, this is not enough to guarantee HP to win back consumers who are concerned about HP's decision making skills. We have been big HP supporters at PLuGHiTz Corporation, but even we are afraid of where HP might go from here.

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HP to Keep PC Division

Continued combination of HP and its Personal Systems Group expected to deliver greater customer and shareholder value

PALO ALTO, Calif., Oct. 27, 2011

HP today announced that it has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company.

"HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It's clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees," said Meg Whitman, HP president and chief executive officer. "HP is committed to PSG, and together we are stronger."

The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP's solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.

The outcome of this exercise reaffirms HP's model and the value for its customers and shareholders. PSG is a key component of HP's strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP's business.

PSG has a history of innovation and technological leadership as well as an established record of industry-leading profitability. It is the No. 1 manufacturer of personal computers in the world with revenues totaling $40.7 billion for fiscal year 2010.

"As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry's broadest portfolio of PCs, workstations and more," said Todd Bradley, executive vice president, Personal Systems Group, HP. "We intend to make the leading PC business in the world even better."

More information is available at www.hp.com/investor/PSG-Decision.


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