HP splits in two.

Don’t you feel like trying something new
Don’t you feel like breaking out
Or breaking us in two
You don’t do the things that I do
You want to do things I can’t do
Always something breaking us in two –Joe Jackson

After years of buying up companies, HP is splitting up. While that’s probably more prudent that exiting the desktop PC business, which is another idea they flirted with in the past, it’s anyone’s guess how this is going to work out.

But it’s what all the cool kids are doing, so it’s what the investors want, and that means HP is going to do it.

On one hand, there isn’t a ton of synergy between consumer and enterprise equipment anymore. So the two companies may do better apart, since they’ll be able to focus on what each of their remaining divisions need. One precedent for this is Lexmark. IBM spun Lexmark off in 1991, and it went from being an IBM afterthought to one of the largest printer companies. There’s money in consumer printers, and consumer PCs might as well come along for the ride.

By the same token, IBM isn’t doing as well as it once did just selling services and software. Then again, it could be a bad year, because IBM has done pretty well for the last 20 years or so divesting non-core businesses over time. In spite of its dominance in the 1980s and the vertical integration that fed that dominance, its market capitalization was fairly flat through that decade. Much flatter than it has been in the last 20 years.

And the businesses IBM has sold off have done OK. Lenovo is doing pretty well selling the old IBM desktop and laptop PCs. Lexmark has sold more printers than IBM ever dreamed of selling. Hitachi eventually sold off the old IBM hard drive business to Western Digital, but they did well for a decade, and that business didn’t have much synergy with Hitachi’s other lines of business.

On the other hand, there’s something to be said for diversification. When one line of business has a down year, other lines can sustain the company. PCs were allegedly dead when HP considered closing up that shop entirely, but this year they’re doing well.

Rather than growing up to be IBM, it could very well be that Hewlett-Packard Enterprise will end up being acquired by IBM–who could then in turn spin off the server and enterprise printing businesses–and HP the PC and consumer printing company will end up being acquired by Lenovo or Dell.

It seems like a rather odd end for a company who bought Compaq over the objections of about half of its large shareholders, then struggled for a good decade or so figuring out how to integrate the two companies and product lines. It was a difficult integration, partly because Compaq itself was struggling to integrate itself with DEC. HP today is worth about half what it was prior to merging with Compaq.

Then again, had Compaq spun off or sold more of the parts of the DEC business that didn’t fit into its overall plan in the first place, perhaps the integration would have gone better. Or, since Compaq didn’t, perhaps HP would have done well to spin off or sell those businesses.

They didn’t, and now they’re creating a company that looks curiously like Compaq prior to its merger with DEC.

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