Spinoff #2: Hewlett-Packard (HPQ) and Its Long-Rumored PC Spin-Off
Hewlett-Packard (HPQ) has been flirting with the idea of a spinoff for some time, admitting in 2011 that it was thinking of quitting computers altogether thanks to profit challenges. The company changed its tune when Meg Whitman took over as CEO, but that doesn’t mean the strategy still can’t be put into action.
Clearly, Whitman has her hands full evolving Hewlett-Packard into a server, services and cloud computing play that can claw enterprise share from entrenched giants like IBM (IBM), Oracle (ORCL) and Cisco (CSCO). And in some ways, HP has already given up on the consumer side of the business with its mothballing of mobile hardware and tablets … so why not just put the laptop and printer division on an iceberg and push it out to sea?
HPQ stock enjoyed a rip-roaring run in 2013, so there might not be any impetus just yet to shake things up. But if continued struggles persist in the enterprise services and software arms of the company, a split might assuage fears that HP doesn’t have what it takes to compete in enterprise with the big guys and isn’t committed to the mission.
Allowing this group to separate and adapt to changes in business technology while the legacy consumer PC and printer business keeps on keeping on might not be such a bad idea in the eyes of many.