So, you've decided to cleave the mighty Hewlett-Packard in two, huh?
First, let's note that the company has still not confirmed a report that appeared this weekend in the Wall Street Journal.
[UPDATED: Yep, the company officially announced the split.]
Still, a number of analysts have been advocating for many years that HP split its PC and printer business from the rest of the company. Perhaps most awkwardly, former CEO Leo Apotheker was booted from the company just three years ago for suggesting such a heretical move.
And it seems like a split is the last card HP has to play at this point.
Over the past decade, the company has spent billions on acquisitions and announced plans to lay off more than 120,000 employees. And yet, through all these machinations, growth has been elusive.
With news of a split leaking out, we can expect the company to address it before its analyst day on Wednesday. So, we'll wait to see if a press release or a conference call emerges on this first Monday of October.
In the meantime, here are five questions we hope CEO Meg Whitman will answer when she explains the potential split:
1. Why now? As noted above, this idea has been kicked around for years. And the company under your leadership has considered and rejected it. So what's changed? Is this tantamount to throwing in the towel on the PC business? Is there a genuine opportunity you think is out there to reboot this business? Or is this really step one toward doing what everyone seems to do with their consumer hardware business these days, which is to sell it to Lenovo?
2. How long? Yes, you'll say this will all be done quickly and painlessly, and it won't be a distraction. But it will be a distraction. There's no getting around the huge volume of work to be done in the trenches to separate these two parts of the company and reorganize some 300,000 employees. HP knows this better than anyone, given all the acquisitions it has made and all the pain it's experienced trying to integrate those pieces. The danger here is that everyone becomes focused on moving around chess pieces (again), and in the meantime, the company falls further behind in areas like mobile, security, and cloud.
3. Why you? The Journal says you're going to be CEO of the enterprise business. But after three years, the company is behind on the turnaround plan you originally designed. And four of the six business segments at HP reported revenue declines in the most recent quarter. Why is Meg Whitman the right person to keep running the company that will inherit the enterprise business?
4. What's next? Speaking of the enterprise business, just what can it do now on its own to reclaim lost ground that it hasn't been able to do as part of the bigger McSynergy corporate shell? And given the strategic reversals, how confident can customers be that HP is going to stick with its plan, whatever that plan is?
5. What's with the names? The last time HP cut itself in two way back in 1999, it birthed a company named Agilent Technologies. Not scintillating, but it's at least distinctive. Now the company is reportedly going with HP Inc. for the PC/printer business and Hewlett-Packard Enterprise for the rest. This seems like it may be more than a tad confusing for customers and partners and us poor journalists. No doubt the branding consultants have been pounding Red Bulls and pulling all-nighters trying to come up with a name strategy. But was this really the best option?