January 18, 2017
Over a year after the split, an article looks at whether this has helped the two companies to turn around.
Yahoo Finance reported that since the split the two companies have been focusing on “restructuring and realigning” their businesses, which included job cuts, trimming down and making some acquisitions. Since 2015 HP has been concentrating more on its products and making them different as well as “enhancing the capabilities of its printing business” to steady the business.
HP Inc signed a deal with Samsung to acquire their printer business last year at a cost of $1 billion (€.936 million), which will help to expand the printer business, added to which they also acquired 6,500 printing patents in the deal. The company is also concentrating on its 3D printing systems mainly for industrial markets, but the article noted that HP Inc lags behind in this sector of the market despite operating in it for five years.
For HPE, having got rid of its content management software tools and customer communications management, which it sold to Open Text Corporation, the company saved more money as it cut nearly 4,000 jobs. The article said that this will “enhance productivity” and lead to “cost reduction”, saving the company around $300 million (€280 million) from “fiscal 2020 onward”.
According to the article, HPE is not far behind HP Inc, and has also downsized by selling its software and IT services businesses, and it said that by doing this it looks like HPE intends “to focus more on fast growing and high margin businesses” like high performance computing, private cloud, all-flash arrays and hyper-converged computing.
It was noted that HPE bought Silicon Graphics in 2016, which “provides HPC services such as servers, storage and data centre solutions to clients in the cloud computing, oil and gas, e-commerce, social networking and other industries”, which corroborates the intention of the company’s direction. This and the amount of job layoffs last year means the company has cut costs, the article stated.
In conclusion, the article said that the split has “allowed a customised approach to two different businesses, which may not have been possible while they operated as a single entity”, and that the opinion of the article was that both companies’ “turn-around strategies are in the right direction”.
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