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September 19, 2020

Hewlett-Packard divides into two companies

November 12, 2015

CINERAMA14/ CC-BY-SA-4.0 This large software company split into two firms, each of which will specialize in a different area.

By PAIGE FRANK For The News-Letter

Hewlett-Packard (HP), the personal computer and software company that began in a garage 75 years ago and has since grown into a monstrous corporate entity, is officially closing its doors, leaving behind two new companies.

This change is a necessary one, according to Meg Whitman, HP’s chief executive. In the past years, HP had been struggling. Computers, one of its primary products, are now facing competition from tablets and mobile phones. The software world is also evolving as new forms of data storage, like cloud storage, are popping up. HP has been torn between focusing on preserving its historical place in the computer market while simultaneously keeping up with the evolving data market of the future.

This has prompted the company to split into two parts, which will be named HP Inc. and Hewlett Packard Enterprise (HPE). HP Inc. will take over the portion of HP that distributed personal computers and printers, and HPE will be in charge of selling large computer servers, data storage, networking and other software and consulting services that most modern companies require.

The goal of the split is to use this specialization in order to increase the chance that each company is successful in its respective area of focus. Rather than trying to compete in the personal computer market and the large data storage and networking market simultaneously, the separate companies hope to have a superior edge by focusing on only one market each.

“We’re leaving behind a company that was very large, running two businesses that were very different,” Whitman said to The New York Times.

That is not to say that abandoning the old Hewlett Packard entails shrinking its size. Each of the new companies is predicted to fall within America’s largest 500 companies and to take in annual revenues of about $50 billion.

“We’re creating two new big companies, not bite-sized morsels, with real capabilities to change things,” Whitman said to The New York Times.

The HP that began in 1939 may be dead; However, its legacy is far from over. Should anyone ever need a reminder, the offices of William Hewlett and David Packard will still be preserved as they have been since the two left the company 20 years ago. They will be kept open to employees of both HP Inc. and HPE with the aim of serving as a physical reminder of the Hewlett-Packard of the past.

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