HP split a step closer

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HP split a step closer
Meg Whitman

Hewlett-Packard’s split has moved a step closer, with official plans filed with the Securities and Exchange Commission in the USA.

While no official cutover date is set, with the separation subject to various approvals, chief executive officer Meg Whitman said the proposed separation is on track to happen by the end of the company's financial year.

This week’s documents detail the proposed size and structure of Hewlett-Packard Enterprise, which will be spun off as a separate company, while the personal systems and printing unit will become HP Inc.

The business units that will make up Hewlett-Packard Enterprise earnt approximately US$55 billion in revenue in the 2014 financial year, with net earnings of $US1.6 billion.

HP Enterprise will be made up of five business segments: Enterprise Group (including infrastructure), Software, Enterprise Services, Hewlett Packard Financial Services and Corporate Investments (including Heweltt Packard Enterprise Labs and business incubation projects).

Key capabilities will include servers, storages, networking, security, services, converged systems, big data, cloud, financial services.

The lion’s share of the revenue will likely come from the Enterprise Group if the 2014 historical financial results are any indication. They show that 49 percent of revenue within what will be Hewelett Packard Enterprise came from this segment, with 39 percent coming from Enterprise Services, six percent from software and six percent from financial services.

Hewlett-Packard Enterprise lists its end-to-end capability as one of its key strengths. “We combine our infrastructure, software and services capabilities to provide what we believe is the broadest and deepest portfolio of end-to-end enterprise solutions in the IT industry. Our ability to deliver a wide range of high-quality products and high-value consulting and support services in a single package is one of our principal differentiators,” reads the filing.

The filing also lists other strengths including, a multi-year innovation roadmap, global distribution and partner ecosystem, custom financial solutions and an experienced leadership team.

The filing also states Hewlett-Packard Enterprise will establish a bilateral relationship with HP Inc. for the purchase and sale of commercially available products and services for internal use, incorporation and bundling in OEM products and services, resale to customers and use in the provision of managed services to customers, as well as joint customer pursuits and development activities.

HP Inc’s portfolio will include multi-function printing, Ink in the Office, graphics, notebooks, mobile and desktop workstations and tablets.

The filing notes that “no assurance can be provided as to the timing of the separation and the distribution or that all conditions to the distribution will be met”.

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