I really hope they name the spun-off computer division "Compaq."
Or one company's Hewlett, and the other Packard?
Hewlett-Packard Plans to Break in Two
11–20 of 119 posts
Re: Hewlett-Packard Plans to Break in Two
#12I worked for HP in early 90.
At that time, I remember old HP (mainly instrumentation groups now Algilent) had a rule of if a product line is > $100mil. They will spin it off to a separate P/L division. It seems like a good sharding algorithm for scaling out a corporation.
They stopped doing it after PC/Printer div/group. A cynical view was it was good for high level corp managers to hide the cost of fleet of corporate jets into the billions $ revenues with almost no profits.
Re: Hewlett-Packard Plans to Break in Two
#13I predict we will see more of this. There was a reason for conglomerates in 1960-70s: shortage of capital meant that cross-subsidizing one division by another was the only viable way to finance growth. These days are long over. Nowadays, it makes much more sense to operate unrelated businesses as completely independent companies, with different set of managers and investors.
Not sure. A lot of the success of Samsung in the smartphone market is due to vertical integration. They save around 10-15% of bill-of-materials cost reduction due to this, they sometimes have unique components(like being first with HD-oled display), they have more control over manufacturers(as a condition for using a Qualcomm processor, they wanted the processor to be made at a Samsung fab), They are less exposed to…
HP is so far behind Samsung in the consumer market that it hurts thinking about it :-). They failed at smartphones and tablets, their computers are kwap, the printers are absolutely awful. Their strength is (was?) enterprise and business hardware from what I can tell.
Re: Hewlett-Packard Plans to Break in Two
#14Re: Hewlett-Packard Plans to Break in Two
#15I predict we will see more of this. There was a reason for conglomerates in 1960-70s: shortage of capital meant that cross-subsidizing one division by another was the only viable way to finance growth. These days are long over. Nowadays, it makes much more sense to operate unrelated businesses as completely independent companies, with different set of managers and investors.
Not sure. A lot of the success of Samsung in the smartphone market is due to vertical integration. They save around 10-15% of bill-of-materials cost reduction due to this, they sometimes have unique components(like being first with HD-oled display), they have more control over manufacturers(as a condition for using a Qualcomm processor, they wanted the processor to be made at a Samsung fab), They are less exposed to…
Indeed, you are bringing very interesting points:
- vertical integration (and tighter control over quality / schedules) for technology companies, and
- size/scale as an advantage in Marketplace.
We have seeing both of these in play, not just with Samsung: Apple is designing their own CPUs, and you can argue they leverage their size to help iTunes and Apple Pay businesses.
Still, there are counterexamples: NVIDIA (and many other successful companies) are fabless, and AMD divested their fabs (by splitting into AMD and Global Foundries).
What HP seem to be spinning off is their consulting arm and the enterprise hardware businesses, where vertical integration/size doesn't matter that much.
Re: Hewlett-Packard Plans to Break in Two
#16I worked for HP in early 90. At that time, I remember old HP (mainly instrumentation groups now Algilent) had a rule of if a product line is > $100mil. They will spin it off to a separate P/L division. It seems like a good sharding algorithm for scaling out a corporation. They stopped doing it after PC/Printer div/group. A cynical view was it was good for high level corp managers to hide the cost of fleet of corporat…
Looks like it's back. Agilent is spinning off the measurement group into a company called Keysight. Announcement was 2 weeks ago.
http://www.agilent.com/about/companyinfo/company-separation....
Re: Hewlett-Packard Plans to Break in Two
#17Both eBay and HP announce splits within six days of each other. Corporate unbundling.
Now only if telecoms and cable companies would hop on the bandwagon :)
Re: Hewlett-Packard Plans to Break in Two
#18Earlier quoted context omitted.
Not sure. A lot of the success of Samsung in the smartphone market is due to vertical integration. They save around 10-15% of bill-of-materials cost reduction due to this, they sometimes have unique components(like being first with HD-oled display), they have more control over manufacturers(as a condition for using a Qualcomm processor, they wanted the processor to be made at a Samsung fab), They are less exposed to…
HP is so far behind Samsung in the consumer market that it hurts thinking about it :-). They failed at smartphones and tablets, their computers are kwap, the printers are absolutely awful. Their strength is (was?) enterprise and business hardware from what I can tell.
A relative of mine with credible information tells me HP is apparently losing a bunch of ground in the server market because of low build quality. HP's trying to compete on prices by slashing them, but their deployments are just that bad.
Re: Hewlett-Packard Plans to Break in Two
#19The most amazing thing for me of the piece is the realization that HP still had $110B+ in revenue last year - its a useful reminder to us (put myself squarely in this category) of some of the behemoths in the valley that get short shift at times in the "Silicon Valley" PR ecosystem. There's apparently some interesting research still going in HP labs - one smart friend moved out here to work on Memristors with them (over multiple alternatives), because they had backed the work for a while.