One of the original Silicon Valley giants has officially fractured into two separate companies -- HP Inc. and Hewlett...
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Packard Enterprise -- the result of a number of watershed moments in the company's recent history.
The idea of splitting HP into two entities dates back at least five years -- long before the HP split became final this month. In 2010, then-CEO Leo Apotheker suggested HP spin off its PC and printer business, a large portion of which came from the tumultuous acquisition of Compaq eight years earlier. While Apotheker came from a software background, he "knew which way was up" with HP's business, according to Charles King, an analyst at Pund-IT Inc., in Hayward, Calif.
The company, credited with helping to hatch Silicon Valley in California, was long known as operating under the motto of "The HP Way" -- the title of the 1995 book written by David Packard -- that dominated company culture. HP was known to hire the "best and brightest" in Silicon Valley, King said. Many of HP's hires thought their HP job would be their last. The company did everything to avoid layoffs, he said.
"Obviously, things are very different now," King said.
The late 1990s marked a turning point for the company, with the hiring of Carly Fiorina and the huge purchase of Compaq -- two moves that industry watchers said ultimately led to the decision to split its enterprise business from its consumer product business.
In her time at AT&T, Fiorina executed well, but was not well-versed in technology as broad and deep as offered by HP, King said. The Compaq purchase included a public battle between Fiorina and Walter Hewlett, who opposed the purchase. He sat on the HP board and was the son of company co-founder William Hewlett.
Fiorina sought to create a "global technology powerhouse" that would offer everything from the data center to the desktop, King said. She sought to create an insurmountable market share for Compaq and HP combined, he said.
When Fiorina was forced out in 2005, the company was "in shambles," King said. HP was "badly damaged and was looking like a shadow of its former self," King said.
Enter Mark Hurd, whose strength was the balance sheets, even if he was not deeply knowledgeable about the product offerings of HP, King said. But his tenure was short and concluded with soap opera-like headlines. He was replaced by Leo Apotheker, whose even shorter tenure included the often second-guessed acquisition of Autonomy Corp.
Charles Kinganalyst at Pund-IT Inc.
The start of the 2010s includes Meg Whitman coming on board as CEO, a hiring that King called "curious," as her experience at eBay was not relevant to HP's business. Whitman in 2011 prevented the company from spinning off its PC business following an internal review that showed keeping the personal systems group within the company would be best for customers, shareholders and partners. Three years later, company executives decided it would split off into two, with a PC business becoming HP Inc. and an enterprise business called Hewlett Packard Enterprise -- a strategy Whitman hopes will boost its fortunes against competitors such as Dell, which took the opposite tact by ballooning in size through the planned EMC acquisition.
"In a few years, it will be considered something of a defining moment; the deal is Meg Whitman's to own, at this point," King said.
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