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Why HP Is Now 2 Companies

Updated: January 10, 2017

In early November, Hewlett-Packard made the decision to split into a pair of businesses, leaving a lot of industry members asking "why is HP now two companies?" Some experts who follow the industry closely are less surprised and even a little skeptical, though there is potential that it turns into a brilliant move for the brand. After more than a decade of turmoil at the top of the legendary PC giant, that could be a major breath of fresh air. But what does it mean for consumers? Probably not much, at least in the near term. In the long term, though, it could have a significant impact on the brand’s product lines.

So, why is HP now two companies?

According to Hewlett-Packard itself, the move is an attempt to inject flexibility and adaptability into their many product departments. Now, one aspect of the business will manage all printer and PC sales, while the other, branding itself Hewlett Packard Enterprise, will offer servers, data storage, and network equipment, in addition to network services to keep that equipment running. The general belief is that the brand’s enterprise side will have a better go of it, with greater growth potential, unsaddled by some untenable problems, but it faces challenges of its own.

For one, while Hewlett-Packard’s Proliant line of servers is highly respected and the market leader, many younger businesses are opting for total cloud networking through other providers. While these businesses may make the shift to a hardware-based IT solution once they grow some and their needs scale up, Hewlett Packard Enterprise will take the initiative in creating its own total and hybrid-cloud solutions. This will bring the monolithic brand up to speed and give it a fighting chance in the coming years. The move likely heralds an accelerated production cycle for the business’s server products, and its increased focus on servers may really open up the market for professionals in need of reliable networking solutions. There has never been any doubt that HP can deliver in this area, and its Proliant servers are among the most popular choices for businesses in need of used, economical options.

What is the history behind the change?

Most people asking "why is HP now two companies" don’t realize just how many challenges the business has faced in the last 15 years or so. From a script that most people are now familiar with, Hewlett Packard leadership underestimated the rise of various technologies, including tablets and smartphones. In the early 2000s, it was not ready when Dell shifted to a direct-to-consumer model for PC sales, a misstep that they never recovered from completely. Leadership itself was a bit unstable, with three CEOs in a little over a year.

However, optimism is now Hewlett Packard’s watchword, as this unprecedented move has the chance to make it a massive player in the server and networking market going forward.