HP has decided to retain its Personal Systems Group (PSG), reversing former CEO Leo Apotheker’s plan to exit the PC business and Meg Whitman wants Hewlett-Packard Co. to sell personal computers after all, a dramatic about-face by the H-P chief executive only five weeks into the latest chapter of her sweeping career. Spinning off the PSG would have cost HP a one-time cost of between $300 and $400 million and the decision had been initiated to try and shift HP over to a post-PC era mode, something along the lines of IBM, which saw major success in shifting out of the consumer PC business and over to consulting and enterprise services………………….
HP announced that it has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company. The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP‘s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation. The outcome of this exercise reaffirms HP‘s model and the value for its customers and shareholders. PSG is a key component of HP‘s strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP‘s business. PSG has a history of innovation and technological leadership as well as an established record of industry-leading profitability. It is the No. 1 manufacturer of personal computers in the world with revenues totaling $40.7 billion for fiscal year 2010. “As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry’s broadest portfolio of PCs, workstations and more,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “We intend to make the leading PC business in the world even better.”