HP's split: How we got here and what we can expect

The inevitable fate of a tech giant

HP headquarters Houston

Hewlett-Packard, in an attempt to improve its fortunes through tax-free distribution of shares to stockholders, has split into two companies. The company's personal-computer business and its corporate hardware and services operations will now operate independently. Meg Whitman will be CEO of HP Enterprise, while Dion Weisler, currently the Executive Vice President of HP's Printing and Personal Systems Business, will lead HP Inc.

The split is expected to be complete by the end of October 2015. That, of course, leaves room for the possibility that HP may just sell off parts of its business, according to some rumors.

Why?

This isn't a novel idea - a number of big companies in tech have chosen to break up lately. Think: eBay and Paypal split just a few weeks back, prompted by Apple's move into the mobile payment game, albeit a bit less amicably than HP's "consciously uncoupling."

Why the choice to split? The companies will tell you that its because operations with different growth profiles and rates of growth are best managed as separate entities. This can be applied to HP, which has suffered sharp sales declines and sees better potential for its corporate hardware and services business than for its printer and PC side.

In the aftermath of the split, analysts, stakeholders, and tech enthusiasts alike are all wondering if this segmented version of HP will drive a more profitable, stronger company? Will consumers choose to remain engaged with the HP brand in its new form? Only time will tell.

From the outstart, this seems to be a thoughtful move, likely driven by the state of the PC market, given the mobile boom. The split could be useful in driving innovation, such as the 3D printing and new computing experience the company touted in its statement as key elements of HP Inc. moving forward.

Meg Whitman
HP CEO, Meg Whitman

What can they accomplish?

The goal, according to Whitman, is to use the split as a way to catapult to organization into two separate, nimble entities that will become true contenders in fiercely competitive markets.

"By transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders," she said at the time of the split.

While HP's tablet offerings still seem far behind the pack, especially given the latest announcement from Apple last month, the company will likely be focused on mobile products, like an HP Smartwatch, which should be coming soon.