Partners: HP Split Spells Trouble For Competition

Hewlett-Packard partners Monday said the computer giant's decision to split into two publicly-traded, Fortune 50 companies will result in more agile and innovative businesses that will turn up the heat on competitors in both the enterprise and PC-printer markets.

"This is going to allow HP to be more nimble and simplify their business both in organizational structure as well as in the overall focus they bring to the market," said Kevin Murai, president and CEO of Synnex, which has grown its HP business considerably over the last several years and won HP's award for top distribution partner in North America four years in a row. "Being more nimble, more focused and more innovative makes for a stronger two companies -- one on the enterprise side and one on the PC-printer side."

HP said Monday it is splitting its business in two, comprised of Hewlett-Packard Enterprise, which will include enterprise systems, software and services, along with HP Inc. The latter will include the company's personal systems and printing business and will retain the current HP branding and logo. Each business counts about $56 billion in sales.

[Related: CRN Exclusive Q&A: HP CEO Meg Whitman On The Split's Impact On PartnerOne]

The split is expected to be completed by the end of HP's fiscal year 2015, ending Oct. 31, 2015, and gives HP shareholders stock in both HP Inc. and Hewlett-Packard Enterprise.

Murai said Synnex and its partners already deal with two separate channel teams for the enterprise and the printing-personal systems business.

"We already have a dedicated focus from those two separate teams," he said. "They already live and breathe the products they have in their groups. To me, it is not a huge surprise. With the success HP has had under [CEO] Meg [Whitman], the timing is good for them to go to the next step. It is to provide an intense level of focus on running two businesses that, in many ways, are are very different."

The split is one more sign of a fast-moving IT market where emerging technology vendors are reshaping the landscape in areas like cloud and big data, Murai said. He sees opportunity for more partnerships or even acquisitions by legacy IT players with emerging technology companies.

John Kolimago, vice president of technology solutions at Blue Bell, Pa.-based Anexinet, an HP Platinum converged infrastructure partner, said he sees the split making HP a more formidable competitor in the enterprise market against EMC and Cisco.

"This frees up Hewlett-Packard Enterprise to make more investments, spend more money on R&D, make acquisitions and be more nimble and fast," Kolimago said, adding that Anexinet is purely focused on the enterprise market, separate from the more consumer-focused PC and printer business. "I see this as great for customers, partners and HP."

NEXT: Partners Say Split Brings Greater Focus

"As a regional VAR focused on the enterprise, I see nothing but upside for us," Kolimago said, noting the difference in channel dynamics selling enterprise infrastructure solutions from selling PCs or printers. "This is going to free HP up to spend more money, more wisely with enterprise partners to create value in the market. PartnerOne should not be one size fits all. Selling enterprise solutions is different than selling PCs and printers."

Kolimago said he sees the HP enterprise group becoming an even better partner for Anexinet.

"The HP enterprise group has already innovated to the point that we can be a one-stop shop with HP across server, storage and networking," he said. "This is only going to help that more."

Anexinet is growing its HP enterprise business at a brisk pace, Kolimago said. It recently closed its first HP converged-infrastructure deal and is poised to close its first HP Moonshot server deal this month.

Whitman's role as CEO of Hewlett-Packard Enterprise is going to be key to the company's success, Kolimago said.

"Five years ago she laid out a five-year journey and she has delivered on it every step of the way," he said. "This is the next step in that continuum."

Kelly Ireland, founder and CEO of Westminster, Calif.-based CB Technologies, an HP Platinum partner doing business with both the enterprise business and the PC-printer organizations, said she is "ecstatic" about the split.

"This is awesome," she said. "It's the right move at the right time. This allows both companies to focus on what is strategic to them. As a solution provider, I see very little crossover between the PC and the [enterprise] businesses. I have some clients that are heavy into [printing and personal systems] and some that are heavy into [enterprise]. This is going to allow them both to be more nimble and innovative driving more strategic value for customers."

Ireland said she is confident based on the progress HP has made in the turnaround over the past few years that the time is right for the split. She praised Whitman and her executive team for doing the "due diligence" to make sure the split will drive more value for all HP stakeholders, from customers to partners to shareholders.

CB Technologies, which has added a dozen employees over the last year to drive HP sales growth, expects its HP business to double over the next year to $150 million, up from $75 million.

"I see this helping us sell more from both of the businesses," Ireland said. "[Printing and personal systems] and [enterprise] are both very important to our business. This will simplify things from an account coverage standpoint. What this does is get more top quality HP people driving more innovation and strategic value for customers."

PUBLISHED OCT. 6, 2014