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June 30, 2015

Run-up to HP split-up sees enterprise splits

HP new logoLater this week, Hewlett-Packard will announce the financial roadmap for the business that will become HP Enterprise, holder of the futures of the HP 3000 replacements from the vendor. More than the accounting is in flux, though. Today the vendor announced the executive VP of its Enterprise Group will be gone before the split-up takes place.

Bill Veghte will split the HP scene, leaving "later this summer to pursue a new opportunity." Big vendors like HP rarely track where an exec like Veghte is heading next. It's not in the same direction as the business that makes Integrity servers, the HP-UX operating environment, or the competitive mass storage product lines that some migrators have invested in.

He's been leading the efforts to separate the consumer printer PC side of HP from its Enterprise sibling, a sort of cleaving of what's become a Siamese twin of business at the vendor. It's been a project underway since last fall, employing Veghte after COO work. This is not the kind of announcement you want to release before a massive split is completed. HP's original estimate for revenues of HP Enterprise was $58.4 billion, larger than the PC-printer side.

There have been exits from a seat this high before at HP. Dave Donatelli left the company, and now has landed at arch-rival Oracle. From a tactical perspective, or at least not quite as customer-facing, HP's got to clone 2,600 internal IT systems, extracting and separating the data inside. It's the opposite effort of a merger, with no safety net. The Wall Street Journal says the IT enterprise split could stall the split-up of the company, if the project doesn't go well.

It's not all glum forecasting among the enterprise industry analysts, though. One report from banking firm Raymond James says the divided HP could purchase its longtime rival EMC. "We continue to believe that an acquisition of EMC by HP is more than a distinct possibility, as HP strives to increase shareholder value following its tax-free spinoff in November, while EMC deals with a high-profile shareholder activist," the report says.

Donatelli was an EMC kingpin before he arrived at HP, a move that EMC sued over during Donatelli's earliest HP months. The EMC scheme didn't have traction anyplace but the Raymond James report. But HP and EMC have tried to merge before, with almost a year of discussions that petered out last fall. HP announced its split-up plans in the same timeframe.

HP's stock dipped below $30 a share today, and it's down about 12 percent over the past month.

05:54 PM in Migration, News Outta HP | Permalink

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