The move by Hewlett-Packard Company (NYSE:HPQ) to split its software and corporate hardware services from PCs and printers has been hailed by many investors as a move towards the right direction. The company’s stock rose over 4% yesterday to close at $36.87.
As for technology investor Roger McNamee, who is also the founder and MD of Elevation Partners, the whole move is coming a little too late.
“HP has gone from having two boat anchors tied together, each trying to float in the water, to two separate boat anchors trying to float in the waters,” McNamee told CNBC yesterday. “They have all the agility of a bag of cement.”
The analyst said that Hewlett-Packard Company (NYSE:HPQ) is 2-3 years behind every industry trend. He said that the company is making a move that it should have made years back. He even pointed out that IBM had made a decision to split its PCs and server business years back while HP is struggling with the move now.
The company will be divided into Hewlett-Packard Enterprise for corporate hardware and software and HP Inc. for the PC and printer businesses. The company is also said to be laying-off an additional 5,000 employees.
Several other analysts have also reiterated that the gains that Hewlett-Packard Company (NYSE:HPQ) posted on the market are temporary, and that the move, plus many others coming along with it such as laying off some more employees will come back to haunt the Silicon Valley giant.
McNamee went further to say that Hewlett-Packard Company (NYSE:HPQ) has been badly managed for the past 20 years, and it’s clear that the current CEO Meg Whitman hasn’t wrenched control of the company either.
Whitman however said that the move creates better offerings for partners and customers and further create value for the shareholders.
This article has been written by Victor Ochieng.