The Hewlett-Packard (NYSE:HPQ) and HP Saga

It is quite devastating for companies to undergo breakups after decades of collaboration. Similar can be said for the Hewlett-Packard (NYSE:HPQ) split. However, sources believe that this is a planned move and should not be taken as a surprise move.

Although, Meg Whitman, the CEO made promises in 2011 to keep the Hewlett-Packard (NYSE:HPQ) together, the separation was announced earlier this week. This has left several analysts in shock but others claim that they saw it coming. An in-depth study of this split reveals some obvious and oblivious reasons.

In light of all chaos caused to of billions of shareholders and thousands of employees expecting redundancy, this separation will not be forgotten easily.

The companies split means a split in divisions of the HP and Hewlett-Packard (NYSE:HPQ) Enterprise. This is expected to affect targets, prospects, new product development. HP’s printer and personal computer divisions will come under the HP umbrella. Analysts fear that HP will become a model of bad business. This is the extent to which this split will affect the brand reputation. The main reason outlined for this is the stagnant PC growth, but others argue that in this digital age, even if PC growth is slow, HP can expect to achieve a lot through the booming printer industry, such as the 3D printing offers.

Another expected change announced by HP is in the current chairmanship. Dion Wiesler, the existing Head of PC and printer department, will take over as CEO. Meg Whitman will step down to nonexecutive chairmanship.

Hewlett-Packard (NYSE:HPQ) Enterprise is expected to integrate with the HP’s server, networking, storage, services, software as well as in financing operating components. Being surrounded by its own set of issues Hewlett-Packard (NYSE:HPQ) still manages to offer a compelling collection of core businesses as well as key divisions, under Meg Whitman’s tenure.

In terms of competition, IBM has stopped the manufacture of low end hardware PCs several years ago, due to unstable economic conditions and paired up with whatever seemed favorable at that time. As compared to Hewlett-Packard (NYSE:HPQ) these companies hold a much stronger financial structure. Hewlett-Packard (NYSE:HPQ) has come face to face with many strong and established competitors. Meg Whitman is expected to continue the role of CEO at Hewlett-Packard, while ex Alcatel-Lucent CEO Patrick Russo is likely to serve as board’s nonexecutive chairman.

This is being seen as quite a symbolic split in the tech world. If Hewlett-Packard’s recent performance is evaluated, it can be concluded that this could be the end of years of poor management and unsatisfactory results. However, HP stands a chance to retain its position in the market, seen as a firm which is innovative and eager to expand. HP has gone on to spend $53.8 billion to acquire 3Com, Palm, Autonomy, Compaq and Electronic Data Systems. This is just a teaser of HP’s appetite for acquisitions, and the company will need to hold on to the innovative, inventive and entrepreneurial spirit that was once introduced by the famous Dave Packard and Bill Hewlett.