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CIOs react to HP split: What took so long?

Can the HP breakup deliver enterprise innovation and better service? CIOs say the Silicon Valley legend has nothing to lose by trying.

Can an IT provider embody youthful innovation and maturity at the same time? Be agile and able? That's what CIOs...

hope will come from HP's decision to split its business in two, forming Hewlett-Packard Enterprise (HPE) to focus on the hardware, software and services it sells to corporate customers, and HP Inc. for is PC and printer businesses.

In remarks Monday, HP CEO Meg Whitman characterized the breakup as a strategic move aimed at both capitalizing on the HP’s consumer products and empowering its enterprise business to seize on and deliver the cloud and mobile-driven services companies need today. Nimble was the watchword of the day.

CIOs get that. They are under pressure as never before to deploy cutting edge computing technologies -- social, mobile, analytics and cloud computing -- that will help businesses effectively compete in a rapidly changing marketplace. Perhaps more than any other business executive, they also understand the need to balance innovative, get-ahead-of-the-pack IT with their companies' tremendous security and compliance requirements. That's something an IT provider intensely focused on enterprise IT could do for them, they said.

Indeed, based on SearchCIO's informal polling yesterday, CIOs seemed willing to give one of the world's legendary IT brands the benefit of the doubt. Sure, they expressed some logistical concerns about the HP breakup, such as whether enterprise customers who buy from both the PC and enterprise sides of the HP house will be handled by separate accounts. There was some grumbling about whether the move might be too little, too late, given the lightning pace of change. But, all in all, they applauded the HP breakup: IT providers must be nimble and able to cut it today. (Oh, yes, they also predicted that Microsoft and Dell might want to follow suit.)

Here is a sampling of their comments:

Greg TaffetGreg Taffet

Greg Taffet, CIO, US Gas and Electric Inc.

It is hard to guess what changes HP will make, but I think this will help us.  I have always looked for more support from HP for the enterprise products, and hopefully this will allow them to properly support these products.   

The workstations and printers are commodity items; we buy them on price.  So I expect that this separation will allow HP to become more efficient and get prices down further.

Joseph MarcellaJoseph Marcella

Joseph Marcella, CIO, City of Las Vegas

I'm no friend of the unrelated conglomerate or of companies too complicated to properly tend to their knitting. For HP, this makes sense. They are separating products from services, acknowledging their different business models, as did Xerox.  Personally, I believe they now have a better chance at innovation and the creation of a leaner, more agile service focus. I wonder if Microsoft should take note of HP?

William FloydWilliam Floyd

William Floyd, CIO, Gold's Gym

My reaction to HP's announcement is, what took so long? PCs, laptops and printers are commodities and low value IT assets. They need to focus in a different way on that business than on the high value services and server/infrastructure markets. Just makes sense and IBM did this long ago. I wouldn't be surprised to see Dell follow suit soon.

Harvey KoeppelHarvey Koeppel

Harvey Koeppel, president of IT consulting firm Pictographic Inc. and former CIO of Citigroup's Global Consumer Group

Splitting enterprise computing and services from PCs and printers seems to reflect an understanding that corporate customers and consumers have different needs and should be addressed individually in the marketplace. That said, this view feels very 1990s to me and could certainly be a "too little, too late" strategy in a world where things change almost daily. How the split may or may not help the company bring its product and service delivery focus into this millennium remains to be seen.  At a minimum, I would hope that HP's history of great innovation (and hopefully, their future strategy) will be augmented by heavy presence within the collaborative social and mobile market spaces.

For a CIO customer, I think it is too early to tell where this strategy could lead and, if I were a buyer in this market, I would do nothing right now and watch very carefully what happens next and where this goes. The answer to the fundamental question of, "why HP?" is still not obvious.

Cynthia NustadCynthia Nustad

Cynthia Nustad, CIO, Health Management Systems, Inc.

I am essentially waiting to see how customer engagement might change in the new company arrangement. If we are a client who buys from both sides of the company, will we have one central account relationship, or will it fully operate as completely separate entities?  I appreciate Meg Whitman's leadership to drive shareholder value, and hope this spurs product innovation at a time we need our vendors to be out ahead of the market.  I support the notion to create a company structure that is more nimble.

Niel NickolaisenNiel Nickolaisen

Niel Nickolaisen, CTO, O.C. Tanner Co.

About a year ago, I was meeting with some big wigs from HP. The conversation drifted towards HP's position in the marketplace. One of the HP folks asked me a question, "What is the biggest challenge you think HP needs to overcome?"

I thought for just a moment and replied, "The trend towards IT specialization. We are rapidly moving to a world of IT specialization and HP is a generalist. You might be able to remain competitive as a generalist but I think it will be increasingly difficult as you compete with specialists. You can always acquire small specialists and add them to your stack, but you still function as  a generalist."

I recalled that conversation when I read that HP was splitting into two distinct companies -- one focused on end-user devices [PC's and printers] and the other on enterprise products and services. I think the split is a good move [for] HP, as today, every organization must figure out the one place to focus and invest its innovation. As a technology generalist, HP had to spread its innovation way too thin to be effective. In fact, I could make the case that HP needs to further sharpen its enterprise focus by identifying the one thing it will do better than anyone else when it comes to servers, storage, networking and services -- those are lots of areas to try to be the market leader and drive innovation. Along with that, it does seem that HP makes a strong point of ease of management across its broad footprint, so perhaps breaking into two pieces will provide enough specialization that they can avoid the perils of being a generalist in the age of IT specialization.

Next Steps

The PC stands alone as HP splits into two companies

HP positions itself as a nimble two-headed monster

HP splits: what's the impact on channel partners?

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Can HP be nimble and able? And how about coining a new word: nimbility
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Yes, I think the company can be both those things, but it will be all about the execution. If HP continues to think like the behemoth it has been, instead of taking advantage of its smaller, more agile organizations, the decision to split could be a mistake. 
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Really interesting reactions. I think Cynthia Nustad's question about logistics is something that will be focused on where as this decision shakes out - how does it affect customer relationships going forward?
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