Did Michael Dell Convince HP to Retain Its PC Business?

michael-dell

HP has spent the past month or two “researching” the potential benefits and challenges associated with spinning off the PC business. The debate ultimately caused HP’s stock to drop significantly, and may have cost former CEO Leo Apotheker his job. When new CEO Meg Whitman arrived in September, Whitman promised to take a fresh look at the potential PSG spin-off. And she promised HP would reach a decision on the debate before the end of 2011.

Now for the twist: Michael Dell didn’t need much time to reach his own conclusions in his own head. During a keynote at Oracle OpenWorld last week, Dell said HP will lose economies of scale if it spun off its PC business but retained its server business. Volume deals on processors, storage and other components would get torn apart if HP’s server and desktop businesses broke apart, Dell essentially told the Oracle OpenWorld audience.

Hmmm… Was someone from HP listening to Dell? That sure seems to be the case, since “sources” are now telling The Wall Street Journal that HP is concerned about losing economies of scale amid a potential PC spin-out.

Smarter Moves

Whatever the case, HP’s reasoning seems to be sound. And it looks more and more likely that HP will retain its PC business, which will likely delight SMB channel partners that work closely with HP.

On a side note: Hewlett-Packard has leaked numerous stories to the media in recent months. Often, those leaks were poorly managed and spiraled out of control. The August 2011 leaks, involving the potential PC spin-out and the Autonomy acquisition, were handled horrendously.

But finally, HP has leaked the right story to the media. HP seems to be leaning toward retaining its PC business.