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Huge shake-up for HP

19 Aug 2011

In addition to announcing the discontinuation of its webOS operating system, as well as associated devices such as the TouchPad, HP also announced overnight that it is looking to purchase British software vendor Autonomy, as well as separate or sell its PC division, Personal Systems Group (PSG).

A statement from HP reads, "HP confirms that it is in discussions with Autonomy regarding a possible offer for the company.

"HP also reported that it plans to announce that its board of directors has authorised the exploration of strategic alternatives for its Personal Systems Group.

"HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.”

The move has drawn comparisons with IBM, which sold its PC division to Lenovo over five years ago.

PSG, which sells PCs, tablets and smartphones, accounted for almost one third of HP’s overall revenue in 2010, although it also has the lowest margins.

Analysts say the spin-off is a reflection of falling margins in the consumer sector, largely due to the success of the high-flying Apple.

A focus on software, particularly business software, is thought to be a better bet, and the possible purchase of Autonomy, priced at US$10 billion by Reuters, indicates this is the direction in which HP is looking to head.

What do you think of the HP announcement? Place your comments below.

Update: HP has issued a release all but confirming the purchase of UK software company Autonomy.

The release says both companies' boards of directors have unanimously approved the deal, which should be completed by the end of the year following approval from shareholders and regulatory bodies.

Leo Apotheker, HP president and CEO, says, "Autonomy brings to HP higher value business solutions that will help customers manage the explosion of information.

"Together with Autonomy, we plan to reinvent how both structured and unstructured data is processed, analysed, optimised, automated and protected."