HP: We'll keep PC business

Stephen Withers
Friday, 28 October 2011 07:21

IT Industry - Strategy

 

When top PC maker HP announced it was considering the idea of divesting that part of its business, many people were surprised. But the company has decided that was a bad idea after all.

 

Among the main objections to the idea of HP selling or spinning off its PC business was that it ran counter to the company's apparent strategy of becoming a 'one stop shop' for ICT requirements - PCs, servers, networking, IP telephony and UC (through various partnerships, though it has sold its visual collaboration unit to Polycom), software, and services.

 

Another was that the reduction in scale resulting from hiving off the PC business would increase the price paid for components used in the remaining hardware lines due to the reduction in volume discounts.

But that's now all academic, as HP has decided its best course is to keep the PC business inside the tent. "HP objectively evaluated the strategic, financial and operational impact of spinning off PSG [Personal Systems Group]. It's clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees," said Meg Whitman, HP president and chief executive officer. "HP is committed to PSG, and together we are stronger."

HP officials referred to the deep integration of supply chain, IT and procurement across the company, and the part PSG plays in the company's solutions portfolio and brand value. And that's just what outside critics of the idea said when the possibility of divestiture was raised by management.

"As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry's broadest portfolio of PCs, workstations and more," said Todd Bradley, executive vice president, HP PSG.