IT world splitting apart–value creation or damage limitation?

Within days of each other two of the IT industry heavy weights have announced that they are splitting their business down the middle:

Value Creation and Damage Limitation

There are significant similarities with both of these announcements

Symantec: Creating two standalone businesses will allow each entity to maximize its respective growth opportunities and drive greater shareholder value.

HP: Provides Each New Company With the Focus, Financial Resources and Flexibility to Adapt Quickly to Market and Customer Dynamics While Generating Long-Term Value for Shareholders

But on the surface this seems to be about separating along the lines of potential for high growth/high share (future stars) vs potentially low growth/low share (future dogs).  In doing so it releases the future opportunity of value creation whilst limiting the damage derived from the constraints of the old.

Symantec-HP

 

Symantec: Creating two standalone businesses will allow each entity to maximize its respective growth opportunities and drive greater shareholder value.

HP: Provides Each New Company With the Focus, Financial Resources and Flexibility to Adapt Quickly to Market and Customer Dynamics While Generating Long-Term Value for Shareholders

At it’s simplest this can be seen as:

For Symantec

Security is a hot space, especially with the focus on “Cloud”.  However whilst they are dominant in the end point security space this is going nowhere and the transformation (business and technical) required for the future will be significant.

Information management however is ready to support the exploitation of the growing volumes of data that is being captured and stored.  This need will only grow as we add more data into the storage bucket.

For HP

They have known for some time that the Personal computing space is highly challenging (PCs and printers) and have come close to off loading this business line previously.  Despite the recent positive news from IDC about PC shipments growing in mature markets (http://www.idc.com/getdoc.jsp?containerId=prUS24981914) there are still significant challenges ahead and others have already jumped into the space for new device form factors (Samsung and Apple).  It seems highly unlikely that this business will scale the heights of yesteryear.

Enterprise is always going to find value (vs price) in technology if correctly sold.  The use of complex technology for business gain is no longer limited to large businesses.  The cloud is democratising access and in turn expanding use to smaller organisations.  This extends the definition of “enterprise” and creates further growth and market share opportunities.

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About SJKParker

Discovering exceptional stakeholder value through innovative technology investments. 25+ years’ experience as a business and technology hybrid. Providing creative and challenging thinking that delivers alignment of essential business needs with innovative technology. Passionate leadership and business model transformation across large enterprises, start-ups, SMBs, and business turnarounds. Experience gained from working closely with leading software vendors on their global cloud strategy, provided associate services to industry analysts, sharing knowledge as a keynote speaker and writing a variety of books covering the Cloud space. Painting business pictures with an IT brush, providing Experience, Passion & Impact Specialties: Business model transformation, Evangelist and presenter, Cloud Computing, Software as a Service, SaaS, Office 365, Azure, Solution Architect, eProcurement, SPLA, Subscription licensing
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One Response to IT world splitting apart–value creation or damage limitation?

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