The announcement from HP that it will split into two different companies is not unexpected, given the public discussion and rumors about spinning off or selling the personal systems and printing business, including the recent failed merger with EMC. IBM undertook a similar activity, ending up with Ricoh and Lenovo acquiring those assets. It took a very long time for IBM to finally offload its Printing Systems business. I was hearing that the business was up for sale as far back as the late 1980s.
HP does not report its Graphic Arts Business revenues separately, but it has to be a relatively small part of the $57 billion in HP Inc. revenues. However, the company's 2013 annual report infers that at least the graphic services part of the business is profitable and growing, leaving the rest to our imagination: "The decline in commercial hardware net revenue was partially offset by net revenue growth in the graphics services and managed print services businesses."
Once the new companies are formed, it will be interesting to see at what level of granularity results are reported and if there will be further movement to break HP Inc. into still smaller separate businesses. It seems to me that the graphic arts business is in a better position to stand successfully on its own that other parts of the new HP Inc. business, which might be a reason not to separate it out. However, it might be in the best interests of the Graphic Arts Business to do so. Time will tell.
We'll be digging to see what other information we can uncover ... although it is likely it will be difficult to get much more detail on the record than is provided in the HP release, FAQ and Fact Sheet.
Discussion
By Robert Godwin on Oct 07, 2014
I wonder how the technology sell will continue for the T-200-300-400 web printers. The RIP requirements are extensive and HP configured their blades to manage the dataflow effectively. Now that those are two separate companies, how will they work together? Will the print division entertain alternative server configurations that are not HP?
By Cary Sherburne on Oct 07, 2014
Excellent question, Robert. So far they are not willing to talk about details, though I do have a request in to interview Dion Weisler.
By Charles Gehman on Oct 08, 2014
Note that it is Dion WEISLER who will be running HP, Inc. He spoke at Dscoop last year, shortly after he came to run the PC and Printing unit of HP. He's a very dynamic, and spirited guy, from my observation, who I am sure will not consider the label of "slow growing" to be satisfactory for this amazing business that will result from the separation. He was formerly at Lenovo, so he's been in a global, growing and highly competitive environment before.
I think this is going to be a really exciting year for HP, and that the result of this will be great value for shareholders and customers moving forward. I read that 3D Printing will be part of the equation for HP, Inc. This makes total sense and many technologies present have extreme unexploited relevance to this.
Looking forward to learning more about the plans, as they solidify, over the next year. Meg has been speaking and with each appearance, more and more details seem to emerge.
By Cary Sherburne on Oct 08, 2014
Oops, thanks for catching my misspelling of Mr. Weisler's name, Chuck. I had the opportunity to speak with him one-on-one at Dscoop and completely agree with your assessment. Meg tapped him for the leadership position that led up to his role today and I am sure he has had a lot of influence on how the split has been engineered. Also saw the 3D printing element. Although I am sure there has been plenty of work going on behind the scenes relative to industrial/functional printing, HP had been silent on the subject so it is good to see it publicly on the table.
It will be a very interesting next several months, that's for sure. Still trying to figure out where Exstream lands, since it straddles both organizations.
By Charles Gehman on Oct 08, 2014
Agreed!
Great example Cary, HP Exstream. Will be excited to hear what you learn about!
By Adam Dewitz on Oct 08, 2014
I doubt we will see any change in the computing stack. HP has some leading technology in this area. Even Canon uses HP blades in its Océ ColorStream and ImageStream systems.
By Paul Gardner on Oct 08, 2014
Also straddling both organizations is Aurasma. But since it came with the Autonomy acquisition, and has been extremely reluctant to work with Printers, it seems likely to end up on the Enterprise side of the business.
Seems a shame for HP Inc not to have an AR play.
Discussion
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