Hewlett Packard Company (HPE) is rumored to be considering spinning off its software unit, with reports indicating that the company is seeking between $8 billion and $10 billion for the sale. This move would allow HPE to focus on its core areas such as cloud storage, networking, servers, business-critical systems, and technology systems services.
Analysts have suggested that divesting the software unit could benefit HPE, which has been through a significant restructuring in recent years, as well as a troubled acquisition of British software firm Autonomy in 2011. The acquisition led to allegations of accounting irregularities by Autonomy, which were denied by the company’s former management.
HPE split into two separate entities last year, with one being HP Enterprise and the other its consumer services unit. Prior to the split, reports emerged of layoffs at the enterprise unit following an outsourcing deal with Ciber, raising concerns about the future prospects of the standalone HP Enterprise.
Despite these challenges, some analysts believe that HP Enterprise will be the company’s most stable and successful division, given the underperformance of its consumer-oriented unit. HPE’s software division reportedly generated $3.6 billion in revenue last year, down 8 percent from the previous year, as customers shifted towards software-as-a-service subscription models.
Overall, while a potential spin-off of its software unit could provide strategic benefits for HPE, the company continues to face challenges stemming from past acquisitions and restructuring efforts. However, analysts remain optimistic about the prospects for HP Enterprise, emphasizing its core strengths in cloud storage, networking, and technology services.
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