Hewlett-Packard Company (HPQ)

[corydorus]

Yes don't be tricked by retrenchment stuff. Always look at the final employee count YOY and their total cost.

[LionFlyer]

Printing has always been the cash cow for HP. Not sure when the milk will dry but I don't think it will be anytime soon.
It been propping up most of the numbers for ages.
The PC/Servers and Services will be most challenging. Either thin margin and commoditised or big competitive players, small cheap players.
That said, Proliant is still one of the better products out there.
Network and storage, no one buy.
PC, got Dell and Lenovo chipping margin.
Services, IBM gets the cream, HCL big and cheap, Accenture positioned as experts. (Still competitive here though, mostly as the other player, not THE player)
Software.... only famous one is Openview and Loadrunner.
Really between the rock and a hard place.

The enterprise and services business has been doing badly compared to their peers. For example, their Cloud offerings are confusing at best. On one hand, they push for Openstack platform, on the other hand, they just bought a competing platform (Eucalyptus). Their brand name recognition (Hellion) not as big as Amazon AWS, Microsoft Cloud or IBM Softlayer.

It's a good but belated move as this will help them focus their business; but it also opens a can of worms. Now, their box/hardware business will not help to subsidize their services bottom line. So good luck to CEO, HP Enterprise.

[corydorus]

That's what i exactly like about the split. Contrary to many people believe, the stronger units are actually the Printer and PCs. Deals make by enterprising units can be "subsidies" or "shared by Revenue" by other business groups of low margins which on paper seems to show Enterprise units are doing well. Splitting them out will put pressure to improve.

[Temperament]

From HP i have spin-off (FOC) of:-
1) Verigy (capitalised already)
2)Agilent (going to spin-off another coy soon)

Now
HP (spin-off another coy)
So from HP, i have altogether 4 spin-offs.
Good or bad?

[corydorus]

This time round is a SPLIT not spin off. And Both companies are viable and big.

[Temperament]

This time round is a SPLIT not spin off. And Both companies are viable and big.

OH! Agilent is going to spin off or split?

[sgd]

I've been mulling over last 2 days about this spinoff so far have seen some of your replies and read others from internet but here's what I really think.

The real reason I believe they are splitting is to set themselves up to look smaller and more attractive to suitors for potential mergers. Almost everybody in this forum saying PC is in decline so any potential suitor who likes and wants to buy or merge with HP may not like to pay for the PC business. So by cutting out compaq or spliting it from HP core business will make HP smaller leaner minus the crust that nobody want and any suitor will also have a dotted line ownership to new HP inc (compaq and printer business) but don't have to pay for it is the beauty of it.

You look at all the players today microsoft ibm oracle they are all selling both hardware and business application of some sort all except HP. And all of them are playing the protecting turf game "buy my hardware get cheap license for software but buy or use other hardware pay thru the nose for the licenses"

I believe HP now already having potential suitors, they didnt or couldn't split away before I believe maybe back then there wasn't anything firm yet so I suspect it's all down to the timing.

So who are the potential suitors and how long will it take?

For that I have some idea but you need to look at the various strategic partnerships of HP. example 3com the network company was a partner before HP bought them out so I'll let you guys do some digging by yourselves.

According to news reports 3rd of the 5 year turnaround plan of Meg Whitman is in 2015 when the company will split so by 2017 it is the deadline for the 5 year plan when it needs to produce result.

[corydorus]

This time round is a SPLIT not spin off. And Both companies are viable and big.

OH! Agilent is going to spin off or split?

I do not have the figures that time. The current Market cap of Agilent is much lower of the two combined. Using this relative numbers, I would say is a spin off.

[thor666]

Theres market rumors of emc hp merger. So yea, that could be one possibility.

I find the whole converged infrastructure concept to be pretty alien. Enterprise it is moving towards cloud since the telcos are doing financing models.. Its cheaper to get resources on an opex basis.

Sent from my D5503 using Tapatalk

[LionFlyer]

http://uk.reuters.com/article/2014/10/15...2P20141015

Well, any HP - EMC merger is off the books for now. Rather interestingly, the timeline suggest that this had been in nego quite a while. Perhaps the split was one of the options that HP was pursuing as an option. With the merger off, the split option was probably chosen as the method to generate value for the shareholders.

In any case, a merger between HP and EMC... who will come off better? Their products overlap to some degree and value may be destroyed.