Is HP's Split a Chance for GBS to Shine?

The stock market believes in business services – or so you might assume based on the 5% bump in share price when HP announced, earlier today, that it was splitting its business into two. One part will focus on personal computer and printer business, true to the company's origins; the other, Hewlett-Packard Enterprise, will aggressively (one might expect) carry on developing and promoting its business technology market – including servers, data storage, software, consulting, and business services. Back in 2011, there had been significant pushback to a similar idea of spinning off the PC business. According to the Wall Street Journal, referencing an analysts’ briefing, the Enterprise division will focus on high-growth through targeted investments and acquisitions. In a statement, Meg Whitman, HP’s chief executive, said the company was splitting up to "more aggressively go after the opportunities created by a rapidly changing market." Today, it may well be that the enormous pace of change within the enterprise technology solutions sector is driving the need for more speed. While analysts like Gartner’s Neil MacDonald have criticized HP’s relatively slow development of cloud solutions, that market – and others that would fall into the Enterprise bucket – is exploding all around us. This division may be just what HP needs to leverage its capability and redefine its business services solutions through a more agile approach. Fundamentally the split is about allowing each division to focus on its growth markets without the distraction of the other. [eventpdf] It will be interesting to see what happens to HP's shared services organization, long running very effectively as a global business services model across a number of global centers. Market analysts like Eric Simonson, Managing Partner for Research at Everest Group, think it highly likely that the GBS would remain with the Enterprise business, more closely aligning with that division’s BPO services. "Shared services often do well in assimilating acquisitions," says Simonson, "It will be interesting to see how and what role the shared services takes in this division." Even if the GBS stays within the new Enterprise group, it would be entirely feasible for the shared services organization to continue to offer its services to the HP Inc. group, whether on a long-term or transitionary basis, says Simonson. "A shared governance framework would provide the necessary formality for such a set-up", he says. Read full release here

Is HP's Split a Chance for GBS to Shine?

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