HP Gives Split Update at Discover 2015

HP Gives Split Update at Discover 2015

HP has delivered an update about its planned split during the Discover 2015 event in Las Vegas.

Meg Whitman, CEO claimed that everything is on target with the creation of the two new legal entities: HP Inc (PC and Printer business) and Hewlett Packard Enterprise (services, servers, storage, Helion, etc.).

Surprisingly, one of HP’s biggest challenges is the separation of its own internal IT system, and some of the numbers here are staggering: 2,800 applications; 50,000 servers; six datacenters; 172,000 system integration tests; not to mention one of the largest SAP estates on the planet. John Hinshaw – HP Chief Customer Officer - presented the move as the biggest of its kind ever. The IT go live is planned for the beginning of August, three months ahead of the official split in November.

If all goes to plan, it would enhance HP’s credentials in terms of being able to deliver major transformational IT projects. It has recently delivered a similar project - albeit on a smaller scale - for Del Monte, a $2bn / 8,000 employee food manufacturing business - within a 8-month timeframe when it decided to split its business in Oct 2013. The perfect rehearsal before the “biggy”.

The “to-do” list linked to the HP split includes finalizing the rationalization of its real estate (600 sites globally), launching its new branding (ticked off two weeks ago) and announcing its PartnerOne Alliance program. But does HP need the disruption associated with such a bold move? Is it worthwhile?

The aim is to make HP Enterprise more agile and fit for the “idea economy”. Making the company more nimble can only be a good thing but HP Enterprise will still be a huge $60bn oil tanker following the separation. HP became too big for its own good; to the point where its $120bn revenue made it almost impossible to deliver the growth expected by the financial markets.

Two key things still require fixing: HP’s “mojo”… and its go to market strategy. How can it bring back more innovation and reposition HP as a thought leader? Services boss Mike Nefkens pointed out that part of the $2bn restructuring budget will be used to do exactly that. The new style of IT marketing message around the four transformation areas is a first step in the right direction.