HPE To Spin Out Its Huge Services Business, Merge It With CSC (cio.com)

itwbennett writes from a report via CIO: Hewlett-Packard Enterprise announced Tuesday that it will spin off its enterprise services business and merge it with IT services company Computer Sciences Corp. (CSC) to create a company with $26 billion in annual revenue. The services business "accounts for roughly 100,000 employees, or two-thirds of the Silicon Valley giant's workforce," according to the Wall Street Journal. In a statement, HPE CEO Meg Whitman said customers would benefit from a "stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape." Layoffs were not a topic of discussion in Tuesday's announcement, but HPE did say last year they would cut 33,000 jobs by 2018, in addition to the 55,000 job cuts it had already announced. The company also split into two last year, betting that the smaller parts will be nimbler and more able to reverse four years of declining sales.

Comments

Re:The remaining 1/3 will turn off the lights.

[jsm300]

Huh? Full disclosure, I'm an HPE employee. Where did you get the idea that HPE doesn't have any hardware products? We spun of HP Incorporated which does the more consumer oriented products that most consumers associated with HP, so that is why they got the original logo. They make printers, laptops, notebooks, desktops and workstations, and a lot more. Basically now we spun off the former EDS that HP bought from Ross Perot some time ago. We're still a major player in hardware. Just go to the HPE website (www.hpe.com) and click on Products. We make servers, from smaller rack servers up to huge Enterprise scale servers. We make storage hardware, network hardware, etc. Basically, if it's something you'd find in a corporate data center, we make it AND support it.

Re:The remaining 1/3 will turn off the lights.

[merky1]

Actually, if HP did go straight to x86, they might have fared better. But they made a huge misstep with IA-64, and hung HP on a more obscure, unstable architecture than anyone else. At that point, they started leaking huge amounts of midn-share, and intel/linux was consistently 1/2 to 1/3 the cost.

Re:The remaining 1/3 will turn off the lights.

[drinkypoo]

Yeah, Itanium was a disaster, however PA-RISC was competetive. They could have kept developing it

Not only was PA-RISC not competitive on a cost basis making it difficult to sell, but it's also expensive to develop a computing architecture. Doing it badly is part of what killed Sun; they developed a whole architecture they just had to throw away because PC processors surpassed the shit out of it before they brought it to market.

HP could not afford to keep PA-RISC going. If they had just chosen to go to PC processors they would have done better than dicking with Itanic.

Re:Undoing the EDS merger...interesting.

[Temkin]

The only long term future I see for these kinds of companies is with government agencies. Agencies in most countries basically aren't allowed to spend agency money on in-house resources. It's always assumed that services companies provide more value for taxpayers' funds, but we know that's not the case. I think that now that companies can offload lots of their day to day IT to cloud providers like Amazon or Microsoft, there will be fewer places for the CSCs of the world to ply their "best practices" trade. It'll be the totally lazy companies that want nothing to do with IT, or agencies that have no choice but to outsource.

Don't be so quick to dismiss CSC. CSC bought Servicemesh, which provides them with one hell of a cross-cloud management platform. Agility Platform ties together AWS, Azure, Rackspace, etc... and a company's in-house vSphere clusters. It's kind of a DevOps monster... Setup the blueprint templates, and policy engine... You can literally have a team of three or four people managing 20+k instances... Add / Drop capacity as needed, and float to which cloud provider is cheapest at the moment.

CSC?

[The-Ixian]

I used to work for a fortune 500 company who farmed out all server operations to CSC... I was on a core applications support team and would often need to work with CSC to spin up new servers or do restores or refreshes. I would say that 1 in 3 times the results of a request were actually what was expected. Most of the time something would go wrong and we would have to go into damage control mode.

There was one time where we requested some new servers be brought up.... which they did... by reformatting production servers... I was always amazed at the novel ways in which CSC would screw things up.

I got the impression that CSC probably had some competent people, they would have to in order to architect and maintain that level of server infrastructure, but we (the customer) never got to talk to those people. We dealt with the drones.... who were less than impressive.