Hewlett-Packard, in order to focus its assets more effectively, is breaking into two companies. Those entities, one concentrating on enterprise products and the other on PCs and printers, will continue HP's moves toward big data, cloud computing, security, and competitive computers and printers. Until the split is final, in late 2015, HP maintains one of the tech world's most comprehensive portfolios of hardware, software, and services. It is the world’s second-largest provider of PCs ( Lenovo is #1); other products include servers, storage devices, printers, and networking equipment. The company’s services unit offers IT and business process outsourcing, application development, consulting, systems integration, and other technology services. The 75-year-old company generates software sales through enterprise IT management, big data, and security applications.
HP’s largest segment is its personal systems (PCs) group, which accounts for about 31% of sales. Enterprise servers, storage, and networking equipment brings in another 25%, while the printing and services groups each contribute about 20%. Software and financial services (leasing, financing) round out the company’s offerings.
The company generates about 35% of its in the US with the rest coming from such markets as Ireland, Israel, UK, Spain, Singapore, China, India, and Japan.
Based in Sunnyvale, California, the company has facilities across the globe with regional headquarters in Geneva; Houston; Miami; Mississauga, Canada; Singapore; and Tokyo.
Sales and Marketing
HP markets its products directly, as well as through a wide range of third-party channels, including retailers, resellers and distributors, original equipment manufacturers, independent software vendors, and systems integrators.
HP reported revenue of $111 billion in 2014 (ended October), down about 1% from 2013 and the lowest revenue reported since 2007. Personal Systems, boosted by sales of consumer notebook computers, was the only product-related growth segment in 2014, posting a 7% sales increase. The biggest decline was a 7% drop in Enterprise Services. The company's 2014 net income was $5.01 billion, down about 2% from 2013. Cash flow from operations broke the company's financial performance pattern, rising to $12.3 billion in 2014 from $11.6 billion in 2013.
In the middle of a five-year restructuring plan, HP went all in when it decided to split itself into two companies. The split, announced in 2014, will result in Hewlett-Packard Enterprise, which will focus on enterprise hardware and services, and HP Inc., which will focus on PCs and printers. The move is to give the new entities more focus and flexibility in dealing with rapid changes in technology. The split is expected to be final in 2015. The two companies should make enough revenue to qualify both to be among the top 50 companies on the Fortune 500.
In the restructuring leading to break-up, HP shut down a short-lived tablet and smartphone business, which was centered on a wireless operating system known as webOS and a line of mobile phones acquired in the 2010 purchase of smartphone pioneer Palm. As such, in early 2014 it sold a portfolio of 1,400 of its and Palm's granted and pending patents to Qualcomm.
The company continued to release new hardware and software products reflecting its emphasis on cloud computing, Big Data and analytics, and security. Its HP Helion set of cloud products and services are for companies working in hybrid IT environments. The company even issued a new line of printers, HP Multi Jet Fusion, a 3D technology that increases speed and lowers costs.
Mergers and Acquisitions
In March 2015, HP agreed to buy Aruba Networks for about $3 billion. Aruba makes wireless networking access point hardware and software, which are used for Wi-Fi connections in by places where many connections are made such as universities, malls, and hotels. Aruba's products extend HP's the reach of its networking equipment to end points as the market for Wi-Fi grows.
Although 2013 and 2012 were quiet years for acquisitions for the company, HP has made significant purchases in the past few years. In 2011, in the largest of its four acquisitions, it paid $10.2 billion to acquire UK-based data repurposing software maker Autonomy to bolster its enterprise software aspirations, specifically in content and information management and business intelligence. Autonomy also brought solid financials to HP, with double-digit revenue growth and good operating margins.