HP Singapore splits into two 'smaller, nimbler firms'

At the tech firm's Alexandra Road office, a new HPE logo has gone up; it is a green box signifying a window of future opportunities. The old logo with a blue background is retained by HP Inc.
At the tech firm's Alexandra Road office, a new HPE logo has gone up; it is a green box signifying a window of future opportunities. The old logo with a blue background is retained by HP Inc.PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES
At the tech firm's Alexandra Road office, a new HPE logo has gone up; it is a green box signifying a window of future opportunities. The old logo with a blue background is retained by HP Inc.
Mr Loh Khai Peng.

HP Enterprise to sell business IT solutions, while HP Inc will focus on PCs and printers

Stiff challenges from other tech firms

Staff of Hewlett-Packard (HP) Singapore went to work today as employees of two companies, Hewlett Packard Enterprise (HPE) and HP Inc.

The tech giant has just been split globally into the two companies, with HPE selling business IT solutions and services, and HP Inc focusing on PCs and printers.

Announced a year ago, this seismic split of the 75-year-old tech giant aims to streamline business by creating two smaller, nimbler companies.

BUSINESS AS USUAL

We continue to sell the same computer servers, storage, networks and services.

MR LOH KHAI PENG, HPE's Singapore managing director

In Singapore, employees have sported new staff badges since last week. Some have moved offices to realign themselves to the new organisations. Employees have also been ported over to their new e-mail @hpe.com, while staff at HP Inc retain the @hp.com address.

There may be as many as 10,000 employees in Singapore, although HP did not disclose its staff strength here.

At its Alexandra Road office, a new HPE logo has gone up. It is a green box signifying a window of future opportunities.

The old logo with a blue background is retained by HP Inc.

The new PC and printer company may have a bigger operation here because its global printer division runs the global printer supply chain here, and it has factories in Depot Road and Tuas which make printer heads and inks, among other items.

HPE also has a manufacturing facility for servers. HP Labs, which works on new innovations, has a centre in Singapore.

  • Massive task

  • Hewlett-Packard is a US$110 billion (S$154 billion) company which is the tech granddaddy, having been founded 75 years ago, right smack in the middle of Silicon Valley in Palo Alto, California.

    It was a gargantuan task to split HP into two companies, HP Enterprise and HP Inc. Here is a list of some things it had to do:

    • Separate 2,700 IT systems in areas like supply chain management and finance, and build over 6,000 servers in less than three months to handle these systems.

    •Set up 1,100 legal entities and moved all employees with their data and system support into these entities.

    •Set up almost 800 new bank accounts.

    • Obtain over 300 new corporate tax identities.

    •Begin separating 641 real estate sites globally, a process that is about 70 per cent complete.

    •Create 375,000 e-mail accounts.

HP was one of the earliest multinational corporations to invest in Singapore and has been here for 45 years. It assembled the first Singapore-made calculator, HP-35, at its Depot Road factory.

Mr Loh Khai Peng, HPE's Singapore managing director, told The Straits Times that separation activities were conducted with little fuss.

"Employees and customers have been briefed. We continue to sell the same computer servers, storage, networks and services. And we have new solutions coming up."

Customers seem to agree. Mr Alan Goh, chief information officer of M1, said that service and support have not slackened.

"There were hiccups but they had been quickly resolved," he said.

A roadshow for employees and business partners was held recently to inform them of future business strategies and to answer any questions they might have on the separation, said Mr Loh, who played a key role in HP's separation task force here.

But behind the calm facade of what Mr Loh described as a "seamless and smooth separation", the old HP had gone through a flurry of intensive work in the last few months to ensure that two companies hit the ground running. Globally, the two new firms had to ensure it was ready to do business with over 20,000 customers, 150,000 partners and 1,300 suppliers.

It had to create legal entities to ensure that HPE could operate legally. All employees, with their data and system support, were moved into these entities. New bank accounts and new corporate tax identities had to be created. New e-mail accounts had to be set up.

Internal IT systems for payroll, human resource, supply chain and other functions had to be separated.

The two new HPs will be listed on the New York Stock Exchange later today.

Ms Meg Whitman, chief executive and chairman of the old HP, will be the new CEO of HPE. Ms Pat Russo, who was previously CEO of telecom company Alcatel-Lucent, will chair HPE's board of directors.

Ms Whitman will also be the chairman of HP Inc, with Mr Dion Weisler as the CEO. Mr Wessler had headed the old HP's PC and printing division.

HPE aims to focus on four areas - cloud computing, security, software and mobility. The company will bring a combination of research and development, business partnerships and acquisitions for its businesses.

HP Inc will naturally hold on to its strength in printers and PCs, and add on a new area: 3D printing.

Industry analyst Lillian Tay said that the two companies have to show investors very quickly that the separation have made them more focused and nimble.

"They have to execute the new strategies quickly in the next 12 months," said Ms Tay, principal analyst at research firm Gartner.

The HP companies will face stiff challenge from tech incumbents like Dell, Lenovo and Canon.

Dell's acquisitions in networking, storage, big data and servers make it a strong competitor to HPE.

While HPE is strong here and in South-east Asia, it is weak in China, a large growing market for IT systems.

Said Ms Tay: "Dell has expanded its operations in China and it has gained better customer traction. HP has not given China much focus to date, and will have to play catch up there."

In printers and PCs, HP Inc will be challenged by Lenovo and Canon, she added.

"The challenge for 3D printing is that the market for consumers is currently very small. HP Inc will be more interested in the commercial 3D printing, where revenues are likely to be bigger. So it will target industries like manufacturing, engineering, automation, healthcare and automobiles."

A version of this article appeared in the print edition of The Straits Times on November 02, 2015, with the headline 'HP S'pore splits into two 'smaller, nimbler firms''. Print Edition | Subscribe