HP Decides It’s a PC Company After All

By  |  Thursday, October 27, 2011 at 2:29 pm

Back in August, HP announced that it felt its PC division, the world’s largest, might be better off if it wasn’t part of HP. It said it was going to review its options and that it might take twelve to eighteen months to come to any conclusions.

A month later, the company fired its CEO, Léo Apotheker, and replaced him with former eBay CEO Meg Whitman. She didn’t take a year and a half to make a decision–and the decision is that HP will stay in the PC business.

“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” said Meg Whitman, HP president and chief executive officer. “HP is committed to PSG, and together we are stronger.”

(Sadly, the reversal doesn’t seem to have any impact on Apotheker’s other big PC-related decision: Killing the TouchPad tablet after six weeks.)

I always found the breakup plausible–if for no other reason than that it’s an idea that’s been around for a least a decade–but I’m glad it’s not happening. And it always suffered from a fundamental flaw: How could it make sense for HP to want to be an enterprise software and services company that also happened to be heavily dependent on profits from ink cartridges sold to consumers?

The next few years of the PC industry are going to be some of the most interesting ones since the beginning of the PC business, since it’s so very unclear what’s going to happen to the PC we’ve known for all these decades. I hope that HP takes that as an opportunity, not an existential threat to its PC business–and that it builds some cool machines in the years to come.

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3 Comments For This Post

  1. Mae Loraine Jacobs Says:

    I do miss the Touchpad. I didn't have the chance to play around with the tablet, but I believe WebOS had the potential. It just needed to be harnessed. I just hope HP is taking the right direction this time. And like you, the author, I also wish to see better-performing PC machines from them in the future.

  2. Drew Says:

    This makes me uncomfortable. They seem to be making decisions on the fly, rather than having any sort of long term goal. They stayed with the tablet for what, six weeks? We are selling the PC business, we are not selling the PC business. What happens when Whitman leaves?

    If I was buying computers for a business, I would not look at HP, since I would be worried it would change it's mind, again.

  3. Office design Says:

    The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.