I'm curious why they choose this method of majority owned spinoffs. What's the rationale behind this financial engineering? Is it that the parts have better multiples than the parent? That they can claim better optics by consolidating the Earnings Per Share?
Yeah, that the unit is more attractive than the parent is listed in the press release: Accelerates HPE's strategy to unlock faster-growing, higher-margin and stronger free cash flow company.
There is also the consolidation and cash payment to consider. All told the spinoff is probably cheaper than trying to buy the competitor.
Very interesting point. In essence this reduces the competitors in the industry, gets them a cash payment, and allows them to consolidate the earnings.
We're trying to integrate with some of the Autonomy stuff at the moment, talking to HP you realize they know about as much as we do about the products - I assume they got the products, but forgot to hire the developers who created them?
There is a management concept of the "value maximizing owner". As someone else pointed out, HP under Meg is all about figuring out who can maximize the return on investment into a particular HP business unit. In the cases of the Printer & Computer, IT Services and Enterprise Software businesses, Meg Whitman and HP's board have decided that an external party is better suited (right synergies, right management structure, etc.) to maximize value. Therefore, they are spinning these businesses out to another entity.
Keeping a business unit on the books just because it generates cash is no longer considered to be the most optimal way to manage a large portfolio. This, and concepts related to an Advantaged Portfolio, are covered in some detail by the folks at Monitor Deloitte [1].
Radios, but I still have two hp48 calcs, and they are as amazing as ever (the reverse polish Lisp even had arrow syntax for lambdas.. How cute is that). I miss this HP.
I've never heard of any Hewlett-Packard software other than BIOSes in HP PC's, and firmware in HP printers, and of course HP-UX plus surrounding paraphernalia.
Micro Focus is involved in the merge, a name synonymous with COBOL.
I worked for a few years on storage at HP. They had the EVA, 3PAR, and Lefthand product lines when I was there. Though HP sold them as storage array hardware, the primary expense was engineering the software, not the hardware. The EVA was a storage array that originally came from DEC and ran a custom RTOS. 3PAR and Lefthand both ran Linux. These were large, reliable software products with big install bases. The EVA was over 100k units. I think there were 60-80 developers working on the EVA across 4 sites at the peak.
They would also have lots of software engineers working on their networking products.
Other operating system software than HP-UX would be VMS and NonStop.
I would guess a lot of the Hacker News crowd has a bit of a blind spot when it comes to Enterprise software utilization. A lot of the stuff, you only see if you're in the IT department at an older company larger than a certain size.
HP is a large, diverse, seemingly disconnected organization. Their enterprise products seem to be marketed and sold almost entirely separately from their standard consumer and business computers, printers, etc. You can spend years dealing with the latter category and never know the former exists, even when they are selling similar products such as servers.
> Micro Focus is involved in the merge, a name synonymous with COBOL
The thing people don't realize about HP/HPE is, we do everything.
Before the HP/HPE split, we were at one point 320k people.
We do general IT outsourcing, we run and staff call centers, we build servers, we build printers (everyone knew that though ;)), we build software in just about every vertical you can think of, we run SaaS (e.g. online training and education platforms). Everything.
Disclosure: I work at HPE (or is it Micro Focus? My group is still a tad unsure - but overall we're not too worried either way).
Newsflash: when you make computer hardware, you're still going to make software, because it doesn't work without firmware for those 10 different processors and SoC's on current mainboards...
As far as I'm concerned, the less software made by hardware companies the better. They suck at software, they don't seem to realize that it isn't "built" like hardware is, once it's out it's never updated. We all end up with computers/devices gimped by "value add" crapware.
DEC was also responsible for the AXP port of Windows NT. Compaq pulled the plug right before the Windows 2000 RTM release. That in turn led to the awesome FX!32 tool that could emulate (and then translate) x86 software to the Alpha instruction set. There were cases where the transmogrified software ran faster than it did natively on x86.
I'm genuinely curious what endgame Meg Whitman is planning for HPE, she seems to be divesting most of the 'E' in HPE. So just commodity servers/bladecenters, storage and networking (half of which is already rebranded Aruba)?
Many well-known CS researchers have left (the then) HP over the past 10 years to other companies (e.g., John Wilkes, Hans Boehm, etc.). So, some people saw early there were problems (though perhaps not due strictly to the recent years).
I work there and today's been utter chaos. Lots of meetings with upper management and people wandering around confused. I came in to work in a new position in a new team with a new manager. They probably shifted all the people they didn't care about into roles where they would be unhappy and eventually quit, as opposed to outright laying people off. Meg's mentality is that basically any unit of HPE has a pricetag. I'm probably going to stick around for a few months and quit if I can't transfer back to my old team.
I work at HPE. To try and add some clarity here are some insights.
Hewlett-Packard, prior to the spit, was a massive company with hundreds of thousands of employees and a portfolio that ranged from home printers and personal computers to enterprise software and hardware and more. It was huge.
HP, Inc - which went out in the split - does PCs and Printers. These are used by both home users and in companies. Did you know some printers get their ink from tanker trucks or are the size of a semi trailer?
Hewlett Packard Enterprise took the other parts which were targeted at big business (sometimes referred to as the global 2000).
HPE is now spinning out the Enterprise Services (ES) division and merging it with CSC. This was previously announced. ES is IT outsourcing. As part of that they write a lot of software. They are IT (bodies) for hire rather than product builders.
This latest announcement is the Software division. Software is written all over HPE. The Software division focuses on software for enterprises, such as Vertica, that is typically divorced from infrastructure.
The remaining part that's HPE is still pretty large and has servers, storage, networking, and a lot more wrapped up in it. All of which has massive amounts of software.
Hope this helps folks who are trying to navigate all the names and their meanings. I'll let others speculate on what all of this means and the motivations behind it.
I think the gem in all of this is HavenOnDemand but absolutely NO ONE has even heard of it ... https://www.havenondemand.com ... it can clearly compete w/ Bluemix ...
With the Cloud Foundry stuff, maybe not. HP have two Cloud Foundry distributions, if I am counting correctly -- HP Helion and Stackato (which was a an early fork).
Disclosure: I work for Pivotal, we are the majority donor of engineering to Cloud Foundry.
Right, that is being spun off and no longer with HPE. Figured the example being sought was software that will no longer be with HPE and not just this specific spin off.
Poor brainwashed idiots who have been hooked on these piles of unmaintainable Java EE crap (impossible to replace), written by a legion of amateurs coders from outsourcing sweatshops, which everyone is now trying to get rid of. "Java - write once, run away!" is not just a meme - it could be seen.
It is not a coincidence that Oracle "lost interest" in Java EE - the whole ecosystems is a total disaster, the monument of bureaucracy, packer's mindset and human stupidity.
But it seems that NodeJS ecosystem is on track to outperform even this.)
The right way to think about HP is as a conglomerate : a company of companies.
Looks like they are trying to create separate focussed companies out of it. This enables different companies to succeed or fail on their own merit. For example, the software company does not have to eat up the losses from the hardware company and vice-versa. This also enables the companies to partner with outsiders. For example, if HPE servers are terrible, the software company can now buy better servers from Dell or Lenovo. This would be hard to do before, as questions would be raised if a product company was unwilling to use it's own products. It can also integrate with products from other companies eliminating the so-called 'strategy tax'.
Disclaimer : I used to work at HP/HPE, but this is pure speculation.
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[ 3.8 ms ] story [ 129 ms ] threadThere is also the consolidation and cash payment to consider. All told the spinoff is probably cheaper than trying to buy the competitor.
It seems HP, IBM, Microsoft, Google, Box, etc. are all trying to build the future of business computing. Good luck with that!
Wasn't it over $1 billion for Autonomy?
Keeping a business unit on the books just because it generates cash is no longer considered to be the most optimal way to manage a large portfolio. This, and concepts related to an Advantaged Portfolio, are covered in some detail by the folks at Monitor Deloitte [1].
1. http://www2.deloitte.com/content/dam/Deloitte/us/Documents/s...
Does anyone know HP well enough to summarize what the "core" business is?
It's a shame that I can only upvote you once.
Micro Focus is involved in the merge, a name synonymous with COBOL.
LoadRunner, Quality Center, and Quick Test Professional
It's actually pretty good software, just overpriced.
They would also have lots of software engineers working on their networking products.
Other operating system software than HP-UX would be VMS and NonStop.
> Micro Focus is involved in the merge, a name synonymous with COBOL
They also own SUSE Linux.
Seems MF has a knack for collecting antiques.
Before the HP/HPE split, we were at one point 320k people.
We do general IT outsourcing, we run and staff call centers, we build servers, we build printers (everyone knew that though ;)), we build software in just about every vertical you can think of, we run SaaS (e.g. online training and education platforms). Everything.
Disclosure: I work at HPE (or is it Micro Focus? My group is still a tad unsure - but overall we're not too worried either way).
As far as I'm concerned, the less software made by hardware companies the better. They suck at software, they don't seem to realize that it isn't "built" like hardware is, once it's out it's never updated. We all end up with computers/devices gimped by "value add" crapware.
Apple is the exception that proves the rule.
Hewlett-Packard, prior to the spit, was a massive company with hundreds of thousands of employees and a portfolio that ranged from home printers and personal computers to enterprise software and hardware and more. It was huge.
HP, Inc - which went out in the split - does PCs and Printers. These are used by both home users and in companies. Did you know some printers get their ink from tanker trucks or are the size of a semi trailer?
Hewlett Packard Enterprise took the other parts which were targeted at big business (sometimes referred to as the global 2000).
HPE is now spinning out the Enterprise Services (ES) division and merging it with CSC. This was previously announced. ES is IT outsourcing. As part of that they write a lot of software. They are IT (bodies) for hire rather than product builders.
This latest announcement is the Software division. Software is written all over HPE. The Software division focuses on software for enterprises, such as Vertica, that is typically divorced from infrastructure.
The remaining part that's HPE is still pretty large and has servers, storage, networking, and a lot more wrapped up in it. All of which has massive amounts of software.
Hope this helps folks who are trying to navigate all the names and their meanings. I'll let others speculate on what all of this means and the motivations behind it.
I would assume stuff like HP-UX will stay at HPE?
With the Cloud Foundry stuff, maybe not. HP have two Cloud Foundry distributions, if I am counting correctly -- HP Helion and Stackato (which was a an early fork).
Disclosure: I work for Pivotal, we are the majority donor of engineering to Cloud Foundry.
There has been some branding changes, but things are settling down.
Afaik Stackato is not too much of a fork anymore - but we have always had a single CF distros.
It is not a coincidence that Oracle "lost interest" in Java EE - the whole ecosystems is a total disaster, the monument of bureaucracy, packer's mindset and human stupidity.
But it seems that NodeJS ecosystem is on track to outperform even this.)
Looks like they are trying to create separate focussed companies out of it. This enables different companies to succeed or fail on their own merit. For example, the software company does not have to eat up the losses from the hardware company and vice-versa. This also enables the companies to partner with outsiders. For example, if HPE servers are terrible, the software company can now buy better servers from Dell or Lenovo. This would be hard to do before, as questions would be raised if a product company was unwilling to use it's own products. It can also integrate with products from other companies eliminating the so-called 'strategy tax'.
Disclaimer : I used to work at HP/HPE, but this is pure speculation.