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Business Management

HP, Symantec: Why Is Everybody Doing the Splits?

First HP and now Symantec, which has said that it will bifurcate into data management and security units. That’s two members of Silicon Valley nobility dividing – a remarkable pair of occurrences given the lack of precedent.

Of course, tech companies have split themselves up before but usually this has meant hiving off a relatively small division – think of Microsoft with Expedia or IBM with Lexmark printers and later x86 PCs and servers. Otherwise, such separations have tended to be forced by regulatory bodies, most famously when AT&T was made to create the ‘Baby Bells’.

Why now? The word (Google News brings up 231 results for this operator in tandem with ‘Symantec’) is ‘nimble’. The justification goes that things are moving so fast today that companies need to stick to their knitting and focus on their core activities to be successful. They’re citing a wave of change from social, cloud, mobile, Big Data and security, and in a way they’re right. The world is changing – it always is – but this is a time of hyper change. So double-down on opportunities and don’t get distracted.

It makes sense – up to a point, Lord Copper.

Hydra-headed tech firms like Google, Cisco, EMC, IBM and Microsoft persist and might argue that they gain benefits from offering a smorgasbord of products and services so long as internal management routines and reporting lines are correctly assimilated. It might be, then, that the trend towards self-dividing is more of a simplification for Wall Street analysts to get a better grip on these large, complex, highly acquisitive organisations… and, it is hoped, mark up values accordingly.

Whatever the reasons, it’s quite clear that there are many companies that could follow the path trodden by HP and Symantec. IBM’s triumvirate of hardware, software and services could be torn asunder, Microsoft’s gaming business arguably has little in common with the rest of its business, EMC could reorganise, one of the server or networking giants could create a cloud-only fiefdom, AWS could easily exist outside the Amazon family…

In this time of flux, what’s clear is that the largest companies are scrambling to reinvent themselves and mimic the fast decision-making abilities of minnow competition. However, most will still attempt to maintain strong links between the new groups and it might become clear that some of these changes are more cosmetic than they at first appear.

 

Martin Veitch is Editorial Director at IDG Connect

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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