HP Splits Into Two Companies Great Lakes Institute Of Management Saumya
HP SPLITS INTO TWO COMPANIES : CAUSE & EFFECT
Spin-off and mergers are not new to HP(Hewlett Packard). Founded in a garage in Palo Alto in the year 1935 by two Stanford students Bill Hewlett & Dew Packard with a past professor Frederick Terman , the company has indeed come a long way . HP spun off a small company Dynac to specialize in digital equipment- the same company was renamed to Dymec and folded back to HP in the year 1959. With the launch of HP2100/HP100 series of mini computers , HP penetrated it`s way into the computer market. The series had continued to remain a favorite for close to twenty inspite of several attempts of replacement.
On October 5 2014, HP finally announced it`s decision to split the company into two divisions : HP Inc. which would comprise of HP`s computers, PC & printer business and HP Enterprise which would take care of corporate hardware, computer servers, data storage, equipment software and services. The deal is expected to be in effect by the fiscal year of 2015 with HP`s CEO Meg Whitman taking charge of HP Enterprise and Dion Weisler taking over the reins at HP Inc. The operating margins of HP Enterprise and HP Inc have been forecasted to be around 10.2 % and 9.4% of the revenue respectively. This news has been welcomed by the CIO`s at Silicon Valley who opine that HP has been slow in adopting to new technologies and hence lost out it`s market pie share to Amazon, Apple, Samsung and Google.
REASONS FOR THE SPLIT The recent times had been a significant challenge for the organization regularly under shareholder weight to turn off operations in a rushed endeavor to be more nimble and benefit from blasting business patterns. The organization had even considered the space of capacity and distributed computing holding chats with some conspicuous names in the business. The advent of newer technologies and rapid adoption of SMAC provided the end consumer a more cost beneficial method to share files globally which further lead to a
Spin-off and mergers are not new to HP(Hewlett Packard). Founded in a garage in Palo Alto in the year 1935 by two Stanford students Bill Hewlett & Dew Packard with a past professor Frederick Terman , the company has indeed come a long way . HP spun off a small company Dynac to specialize in digital equipment- the same company was renamed to Dymec and folded back to HP in the year 1959. With the launch of HP2100/HP100 series of mini computers , HP penetrated it`s way into the computer market. The series had continued to remain a favorite for close to twenty inspite of several attempts of replacement.
On October 5 2014, HP finally announced it`s decision to split the company into two divisions : HP Inc. which would comprise of HP`s computers, PC & printer business and HP Enterprise which would take care of corporate hardware, computer servers, data storage, equipment software and services. The deal is expected to be in effect by the fiscal year of 2015 with HP`s CEO Meg Whitman taking charge of HP Enterprise and Dion Weisler taking over the reins at HP Inc. The operating margins of HP Enterprise and HP Inc have been forecasted to be around 10.2 % and 9.4% of the revenue respectively. This news has been welcomed by the CIO`s at Silicon Valley who opine that HP has been slow in adopting to new technologies and hence lost out it`s market pie share to Amazon, Apple, Samsung and Google.
REASONS FOR THE SPLIT The recent times had been a significant challenge for the organization regularly under shareholder weight to turn off operations in a rushed endeavor to be more nimble and benefit from blasting business patterns. The organization had even considered the space of capacity and distributed computing holding chats with some conspicuous names in the business. The advent of newer technologies and rapid adoption of SMAC provided the end consumer a more cost beneficial method to share files globally which further lead to a
References: : http://www.forbes.com/sites/stockoptionschannel/2014/10/20/interesting-november-stock-options-for-hp/ http://www.cityam.com/1412609654/hp-share-price-jumps-after-split http://en.wikipedia.org/wiki/Hewlett-Packard