So Much for HP Putting All Options on the Table
Reports indicate Hewlett-Packard won’t sell troubled Autonomy, EDS or other major units to restore the company to sound footing.
Send to Kindle
The “For Sale” signs aren’t exactly swinging outside Hewlett-Packard’s offices. Reuters is reporting that sources inside the beleaguered tech giant are turning away suitors for its assets, particularly Big Data unit Autonomy and professional services division EDS.
According to Wall Street Journal, well-placed sources inside HP say CEO Meg Whitman and management has no plans to sell off major units to streamline the company and restore the company to sound footing.
The report comes just weeks after HP noted in government financial disclosure statements that it could sell off some of its more troubled units and assets – even if it meant taking a loss in the transaction.
Some analysts and observers said HP’s signaling a willingness to streamline the organization was a positive sign that it was serious about correcting years of mismanagement and missteps. Solution providers tell Channelnomics that selling off units could help HP focus on more productive assets.
Autonomy and EDS, the sources of $16.8 billion in write-offs, have been seen as prime for selling off, as they would relief HP of troubled assets. U.S. and U.K. authorities are currently investing Autonomy’s former management for alleged accounting irregularities that led to $8 billion write down against the 2011 acquisition of the company.
But Autonomy and EDS aren’t the only units plaguing HP with poor performance. In the last quarter, HP saw overall revenues fall 5 percent, and several operating units saw serious declines. Servers sales are down 6 percent. The large Enterprise, Storage and Networking unit declined 9 percent. Personal systems and PCs fell 14 percent. And printers dropped 5 percent.
Several suitors came calling upon HP with inquiries and offers for some businesses and assets because of the SEC filing. Some may have been seeking bargains, as HP noted that it may have to sell some assets below market value.
HP isn’t comment on the new reports. Could be that some of the offers were simply too low for HP’s tastes. Officially, HP is saying that the technology of some units, especially Autonomy and EDS, are essential to its rehabilitation and future plans.
If the Reuters reports bear true, it does show that HP has limits to what it’s willing to accept to restore its stability and long-term viability. However, the channel and market’s patience is wearing thin. HP has been struggling for a year and a half; and Whitman reportedly took a $15 million pay day in spite of HP missing its targets.