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Life after HP cracks off into two: Execs spill the beans – tiny little beans

HP Enterprise will be 'simpler, more focused' ... but what else?

So how will splitting the company help?

Following Whitman's opening comments, a series of HP execs took the stage to explain the four "transformation areas" that HP Enterprise will focus on. Not surprisingly, these corresponded with the various offerings provided by the current HP's Enterprise and Enterprise Services groups. They gave them lofty names, but they boiled down to hybrid infrastructure, security, big data, and mobility.

What wasn't touched on at all, however, is how current HP customers will be transitioned to working with either of the two new companies, post-split. Many will likely end up being customers of both HP Inc and Hewlett Packard Enterprise.

Even more crucially, nothing was said during the keynote about just how splitting HP into two separate companies will do anything to address the firm's sagging fortunes of late.

HP's total revenue for its fiscal 2014 was flat from the previous year. The Enterprise Group's revenue for the year was likewise flat, while revenues for the Enterprise Services division sunk by 7 per cent, year on year.

The story was even worse for the firm's most recent quarter. HP's Enterprise Services revenue was down 15.5 per cent during Q2 of 2015, as compared to the previous year's quarter. And while sales of industry standard servers grew by 11 per cent, year on year, sales for all the other Enterprise Group subdivisions shrank.

The divisions that will become HP Inc have fared better, but not by much. Both the Personal Systems and Printing divisions have reported revenues that were either flat or in decline for each of the first two quarters of HP's fiscal 2015.

Streamlined, focused ... and smaller

During the keynote, Whitman said HP Enterprise's new logo – complete with its perplexing green rectangle – was emblematic of the new company's "simpler structure and more focused portfolio."

Similarly, Nefkens said during a Q&A session with the media following the presentation that splitting off from the PCs and printers business would give HP Enterprise more focus and allow it to move with greater agility.  "We will be quicker to respond, we'll be much more proactive, and we'll be pushing innovation very, very heavily," he said.

And according to Antonio Neri, a senior VP in HP's current Enterprise Group, if customers are worried about their support relationships with the two HP companies post-split, they shouldn't be.

"Customers do business with a line of business, so they already have dedicated account managers," Neri said, adding that the customers he's spoken to never ask much about how the split will affect their accounts. "The fact that we don't have to explain why we are separating is a huge deal."

But chopping HP in half won't be as easy as simply dividing up the spoils. Whitman is reportedly mulling a major restructuring of the enterprise business that she's hoping will save as much as $2bn in costs per year. And during the press Q&A, Nefkens confirmed that HP is already working on "exiting high-cost labor in high-cost countries" – in other words, shutting down spendy offices.

That means we can almost certainly expect more layoffs at HP before the whole transition is done. For HP customers, what remains to be seen is whose. ®

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