Tomahawk, WI 10/06/2014 (Basicsmedia) – The proposed split of Hewlett-Packard Company (NYSE:HPQ) according to Enderle Group’s analyst, Rob Enderle, during an interview on CNBC, will help in the pursuance of alliances in the cloud space. The Wall Street Journal reports that Hewlett-Packard Company (NYSE:HPQ) is considering splitting its personal-computer & printer business from its services business.
“Realized that the PC and printer businesses already pretty much a business in its self with its hierarchy and leadership and that leadership will move to new companies. This would mean that they will have their stock, their finance organization. They will be free to pursue alliances with some of Hewlett-Packard Company (NYSE:HPQ)’s current competitors in the cloud space,” said Mr. Enderle.
Hewlett-Packard Company (NYSE:HPQ)’s printers and personal computer division has been performing well but has also been showing signs of going down, a trend the company is trying to counter with a possible split. A split will essentially pave the way for increased focus on 3-D printing model of the business, which is expected to be a hit in the coming years.
A possible split according to Enderle will help the PC and Printing division pursue deals with the likes of International Business Machines Corp. (NYSE:IBM) and Noble, to accelerate growth in the space. A split will also come as a surprise as CEO, Meg Whiteman, has over the years remained firm on the two divisions working together under one arm instead of splitting them up.
The PC and Printer business remain one of the critical divisions for HP always at hand to generate impressive returns. The software and server business has on the other had been struggling a trend that looks set to continue according to Enderle with the entrance of new competition into the space.
“[…] The server and software side that’s an area that has been pretty hard all the way through here. There is a big concern off course that Amazon.com, Inc. (NASDAQ:AMZN) is going to come through curve up the word if Google Inc. (NASDAQ:GOOG) doesn’t. Hewlett-Packard Company (NYSE:HPQ) realized they needed to divide and conquer,” said Mr. Enderle.