HP has a change of heart: Now to figure out its future with the PC

Steve Ranger's Notebook: Tricky decisions ahead for Meg Whitman...

HP has decided to keep its PC business after all - now it has to figure out what the future looks like for the business, says silicon.com editor Steve Ranger.

Well, that was a rollercoaster few months for HP. The company has quickly wrapped up its evaluation of "strategic alternatives" for its Personal Systems Group (PSG) - that is, worked out whether it is best to spin off, sell or keep it - and decided the unit will remain part of the company.

"HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It's clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees," said Meg Whitman, HP's newly installed president and CEO. "HP is committed to PSG, and together we are stronger."

HP's review told its execs what pretty much everyone else in the industry knew already: that the PC business was deeply integrated with the rest of the company's supply chain, IT and procurement, and contributed a huge chunk of credibility to the rest of the portfolio. On top of that, the cost of recreating all of this infrastructure if PSG was spun off in a stand-alone company "outweighed any benefits of separation".

All of this brings to a close a moderately bizarre chapter of HP's history, which saw it not just consider spinning off its PC business, but also buy Autonomy, shutter its webOS business and send the TouchPad to an early grave along the way.

HP TouchPad

HP's TouchPad was a casualty of the company's indecision around the future of its PC businessPhoto: Steve Ranger/silicon.com

The general HP's decision to hold onto PSG has met with a positive response, along with quite a lot of headshaking from industry watchers who are bemused by the whole saga, and HP will certainly have to spend some time rebuilding its credibility.

Ovum chief analyst Carter Lusher applauded the speed with which Whitman decided HP's intentions for the PSG, pointing out: "The announcement by now former-CEO Leo Apotheker that PSG was undergoing a strategic review and could be sold or spun off was an unmitigated disaster."

Lusher added: "Everything around the PSG strategic review decision sent shock waves of uncertainty through the enterprise and public sector IT executive circles as it called into doubt HP's ability to execute a clear strategy for any product or solution.

"IT executives need insights into strategic vendors' intentions in order to make multi-year commitments, and HP's actions called into doubt its stability."

But Lusher said Whitman's swift decision-making shows that...