Data center News
Partners: HP Split Could Unlock Value Of Both PC-Printer And Enterprise Businesses
Hewlett-Packard solution providers said a potential split of the $112 billion company into a PC-printer company and an enterprise computing company could unlock the value of both businesses.
"If it happens it's a brilliant move," said Mike Strohl, CEO of Entisys Solutions, a Concord, Calif.-based HP Platinum partner, No. 253 on the 2014 Solution Provider 500. "The PC-printer business is more consumer-focused and the enterprise business is a commercial-focused business. Separating them will allow HP to drive more innovation, propelling them and their partners into a market leadership position."
Strohl was responding to a Wall Street Journal report that HP is set to split into two companies: a $56 billion PC and Printing business and a $56 billion enterprise computing, software and services business.
The split into two companies would be accounted for as a tax-free distribution of shares with HP CEO Meg Whitman having a hand in both companies, the Journal reported, with the official announcement coming as soon as Monday.
"To have the consumer-focused PC-printer business and the business focused enterprise systems business run uniquely is the right thing to do," said Strohl. "It should create an acceleration in value around both businesses. HP needs to structure the PC and printing business for the needs of consumers and the enterprise business for businesses."
Strohl said he sees the sharper focus on the enterprise business giving HP an edge against rivals like Dell and Cisco Systems in the fast moving converged infrastructure systems market. "This is going to give HP more focus in a very, very competitive market," he said. "To me this is going to unlock more and more HP innovation. It spells more opportunity for us."
HP is already Entisys' fastest growing vendor partnership, said Strohl. He sees that accelerating with HP continuing to outpace competitors if the company splits PC-printing and the enterprise business into two separate companies.
NEXT:Partner Says The Split Could Provide New Competitive Spark For Both Businesses
Sam Haffar, the CEO of Houston-based Computex Technology Solutions, one of the top national solution providers at No. 123 on the 2014 CRN SP500, said he also sees a split providing a new competitive spark to both businesses.
"This shakes things up and unlocks value," said Haffar. "I think it could give those businesses more focus allowing them to perform better. They are different businesses. They should operate independently. The Enterprise Group and PPS (Printing Personal Systems Business) operate independently anyway. We don't see the synergies between them in the field. As an HP Platinum partner we are going to continue selling and supporting both product lines whether they are independent or the same company."
Haffar said both his HP PPS and Enterprise businesses are growing at a robust pace and he expects that to continue if there is a split into two businesses or not.
The reports of a potential split of HP into two businesses comes only two weeks after it was reported that merger discussions between HP and EMC broke off.
Haffar said he sees more consolidation in the technology solutions market as inevitable. "There are more companies popping up that have good technologies," he said. "I think we are going to see more consolidation and acquisitons in the vendor and the solution provider worlds Change is in the air."
Bob Venero, the CEO of Future Tech Inc., a Holbrook, New York solution provider, No. 234 on the CRN SP500, said he is anxious to hear more details about the split.
"The PPS team is a different team than the enterprise team, but there is definitely overlap in the support model," said Venero. "It is going to be very important for partners to understand what the support mechanisms we are using today and how this will affect support teams and the channel going forward."
Venero, who was already scheduled to speak HP's Whitman in the next several weeks, said it is going to be critical for HP to communicate the impact of the split. "Anytime there is an unknown like this you have the potential for fear, uncertainty and doubt at both the partner and customer level," he said. "Anytime something happens like this we look very closely at what the potential impact will be to our business. We will be following this very, very closely."
PUBLISHED OCT. 5, 2014