HP Split Impact Will Travel To India After A Year?

The iconic US company founded by Bill Hewlett and Dave Packard in Palo Alto in 1939 in a garage, is going through split pangs with the company deciding to separate a few of its units from the main trunk. While the nitty-gritties of the split are a well-guarded secret with spokespersons refusing to reveal too much at the moment, a broad outline is already out in the market for consumer consumption. By that, it is said that HP will split companies into two at this juncture. One would be called Hewlett Packard Enterprise and would stay focused on market-driven technology solutions like servers and data management equipment, services and of course, client software.

The other unit, called HP Inc will focus on the ever-growing market for personal computers and printers, thus retaining the company logo.

The separation, if one may call it that, will most likely fall through in the beginning of next year. The move is termed ‘monumental’ to the plans of reshaping company’s future in treading a new path with an eye on the future market trends. As of now, company’s PC and printing business accounts to almost half of its revenue and profit. Though the details are not known, the sharing of over 30,000 employees between two companies is something the board meetings are discussing for their main agenda. Layoffs are most expected around this time, with the numbers pitted at a good 5,000 employees having to receive the golden handshake from the company.

The company which altered the course for Silicon Valley successes with its revolutionary products, and triggered a PC revolution in many countries, had struggled to come of age to the new era of mobile and online computing. Lately, it was clearly overshadowed by younger rivals in the mobile computing space.

The recent times had been hard on the company often under shareholder pressure to spin off operations in a hurried attempt to be more agile and capitalise on booming business trends. The company had even considered the space of storage and cloud computing holding talks with some prominent names in the industry.

When the news of split came through, it didn't shock many since the move was much discussed and often shelved for want of a better option.

In 2011, the company had gone close to executing its plans of a different pattern of splitting up under the leadership of CEO Leo Apotheker, but for best known reasons, it wasn't taken to its logical end.

As of now, the names of those who will assume the leadership of separate units have been revealed. Current, HP lead independent director Patricia Russo would head the ‘Enterprise’ while CEO of PC and Printer unit would be Dion Weisler, who is currently in the same division.

With India being one of the most important markets for HP with the increasing demand for PCs, the company’s splitting is sure to have a fair impact on its India operations too. However, it would take more than a year before the full impact of this decision affects the company’s India unit. Because, for HP, India has been the biggest customer, notwithstanding the shift it saw in the global market.

Though HP’s global top position in the PC sector was lost in the west long ago, the company occupies the same top position in India, completely unaffected by international trends.

HP has always held a special position in India, with having set up a research and development centre in India, that’s said to be the largest facility outside its US headquarters.

While the level of apprehension among the company’s base units in India is growing, it may well take anywhere between 12 -15 months for the tremors to reach India. Market analysts said the decisions taken at the HQ level will be closely guarded to produce any negative impact that may cause the loss of credibility or market share in India.

Though a late entrant in the arena, it was just a few months ago when the company unraveled its plans to crack the tablet market in India, with the country boasting of highest online revenue generators outside the US.

HP Voice Tabs were launched first in India, much before the world even caught a glimpse of the product. That kind of nailed the importance the company associated with its Indian customers and its decision to ride the online wave. The company has more plans up its sleeve for the phablet market in the price-sensitive India.

With the business opportunities being dynamic in the ever vibrant markets as India, HP’s internal decisions wouldn't affect the company’s market too much unless the products suffer through this phase. If the products continue to be as good as they are, and the company continues to innovate through its R&D division in India and elsewhere, India and HP will remain unaffected for each other