So seems a few days I wrote about gigantism in the tech industry (see my articles on Daft Blogger Magazine)and just as a quick answer we have had new split decisions coming from two big giants…HP and Symantec. Come on guys I didn’t know my opinions were so important for you…
In a period of hard recession it is quite normal to see companies that try to cut costs and staff, but HP and Symantec goes further and decided to split themselves: is this a good and sound operation? And what does it means for those companies?
Let’s talk first about HP.
HP –> “Hewlett-Packard Enterprise” and “HP Inc.”
The continuous growth of HP, and the continuous acquiring of companies has always been quite curious. It is seldom followed by an understandable sales and product strategy and so the company has been always be a strange mix of never solved identities.
We can easily name at least 3 critical areas in the soft belly of this giant whale:
- EnterprisePrint integration
- EDS and services
The consumer area has always been a really competitive area, and HP product have had big troubles to emerge. It was not really a problem related to quality but to marketing, communication and strategy. We can hardly name HP consumer’s product for something amazing or thrilling, nor for design nor for introduction of new technologies nor even for low prices. Basically the offering has been anonymous both in the computer and the printer area. While we can expect more technical considerations in the purchasing process in the enterprise (although this is quite not always the case) we, for sure, can’t expect it in the consumer space where “feelings” takes a big part in the purchasing strategy.
At the same time we can’t see HP as a competitor in the low targetprice market. So It was hard to understand why HP was there.
It could have been a smart idea, may be, after Compaq acquisition trying to have a brand for enterprise product and a brand for consumer product? Too late to give an answer, but for sure the consumer segment has been bad managed. Will the split help to solve this?
So we have a company who is dealing in the enterprise market selling quite everything: printers, servers, networking, software, security….. the problem here for people who knows HP is that different BU does not talk together. Printer and Servers does not have anything in common, I know, but we could expect that if you’re a salesperson trying to sell a printer system to a company and hear that they could need also some datacenter stuffs you could call your colleague….well it is not the case in HP.
This split from this point of view will just communicate to the external world what is happening since the beginning in HP, the printing division has nothing in common with the data center one, not even the company global target, so splitting it in two is just a logical result.
Is this something we could not have afford differently? Again integration and a common direction is a tough goal it needs great management and almost better leadership, things that have lacked according to the people who have worked with or in HP in the last years.
But the complexity inside HP was affecting all the aspect: sales process and product development are just the spotlights.
While in the printing space is still a nightmare to ask to HP a cost for page when dealing with high volume printing systems (guys give your sales people the right tools to compete) in the enterprise space things are not always so clear as well.
And some acquisitions did not help to clarify the efforts: may be you remember the 3com affair……
So lack of vision, strategy, execution or all of them?
Will the split help to solve this?
EDS and services
And now the most painful part, this is a never-ending story, since acquisition. Profit were not just good, complexity and resistance basically never allowed a real integration. We know that as an Enterprise Service Division the HP guys were not even committed to offer HP HWSW. This is understandable of course while we want to compete as system integrator, but would not help the rest of the company to watch those people in a friendly way. At the end HP started to lay off people from the former EDS starting, of course, with packages and sending away the top performer salespeople and not the underperformer management, but this is quite common in all the recent companies layoff. Hardly the management assume the consequences of their poor management and strategy and so they just lay off people because is the quickest way to make savings, no matter the consequences in mid-long terms (should I talk about recent laying off announcement of engineering in networking company?).
Will the split help to solve this?
We’ll see but my personal opinion is that the split itself will not be the solution, unless the split will be the via for other operations, at the moment untold but present as a white noise in the market: Acquisition..dismissions… and so on…
Symantec –> “Symantec Security” and “Symantec Storage aka VERITAS software” (?)
Sometimes they come back.
In 2004 Symantec announced the acquisition of VERITAS software, the acquisition was completed in 2005. The underline idea in this operation was partially due to broad Symantec portfolio merging a leader in software security with a leader in software storage management.
One of the desiderata of Symantec higher management at those time was to bring inside Symantec some “enterprise” knowledge in terms of management and customer relationship. The truth at those time was that Symantec was trying to change its identity as a “antivirus” company into something more “enterprisish” , the acquisitionmerge with VERITAS software should have brought a different image to the company.
Veritas salesperson were used to talk with higher level contacts than Symantec ones, you usually do not talk with a CEO or a CTO if it is just an antivirus you’re dealing with. The change would have brought a different perception of Symantec in the large enterprise space, and would have bought the chance to offer differently the portfolio.
But things gone differently, storage and security market are not the same, and security competition landscape was completely different from the storage one at that time. The merging was not so successful, and a lot of the previous Symantec people leaved, makingmanagement and salespeople the real winner of the internal battle, but at what cost? The cost have been painfully clear erasing little by little the idea of Symantec as a security company, while dealing with internal never-ending politics and a few good product management Symantec started to lose the channel who was driving most of its security market while not able to gain a direct enterprise touch.
So rumors started to comes, selling the consumer area? But it was basically giving Symantec 50% of its revenues, so let’s Norton brand come and disappear and comes again. Making acquisition? Brightmail leadership and brand was used and then forgotten and then used again…
A few but well confused ideas…
Lack of direction and management has been affecting the company image and performance: this affected product development as well disaffecting customers and partners, discouraging internal salesforces and engineering…
And now … Will the split help to solve this?
So two giants have realized that sometimes gigantism could affect performance and identities: without a common vision, a sound strategy and a great tactical direction merges could become just a way to broaden complexity. But splitting what has been done in the past can’t be the solution itself, if it is not followed by a clear understanding of what the split means. The underline suggestion is that a split should be followed by a radical change in the management, because this is where the two companies failed.
It is not a problem of not-committed salespersons or bad engineering, this is a problem of identity and strategy that means bad MANAGEMENT. And this is the truth at the highest level as well as the forwarder level (those layers of managers whose activities seems to be based on collecting spreadsheets from the bottom and forwarding them to the upper level, have you ever met those kind?).
I have great personal memories of Symantec, so I truly hope that this move will help them to gain back the role they used to have, as well as I have a lot of great friends that work or have worked in HP and EDS so I wish all of them the best of luck in those hard days.
That those splits be the beginning of a reborn and not the last cry of a dying whale.