HP considers spinning off PCs, abandons TouchPad

Hewlett-Packard is considering spinning off its PC operations, will discontinue operations for webOS devices and will buy Autonomy Corporation for $10.3 billion.

PC spin off (not as funny as the original)
In a flurry of announcements today, Hewlett-Packard announced it would explore “strategic alternatives for its Personal Systems Group (PSG)”.  The company said it would consider a range of options, including “the exploration of the separation of its PC business into a separate company through a spin-off or other transaction.”

The statement said that PSG was the leading manufacturer of personal computers in the world with annual revenues of about $US41 billion in the 2010 fiscal year.  The company said that alternatives for PSG would help the company accomplish its strategic goals, which focussed on cloud, solutions and software.

“We believe exploring alternatives for PSG could enhance its performance, allow it to more effectively compete and provide greater value for HP shareholders,” HP president and chief executive officer Leo Apotheker said in the statement.

HP said it expected the exploration process to be completed within about 12 to 18 months.

In its financial results for the 2010 fiscal year, HP announced PSG revenue declined 3% year over year but remained the PC market leader in terms of units, revenue and profit share.

No webOS devices
The news kept coming as HP also reported it planned to discontinue operations for webOS devices, specifically webOS phones and the TouchPad, which has just been released in New Zealand.  The company said the devices had not met “internal milestones” and financial targets.

“HP will continue to explore options to optimize the value of webOS software going forward.”

Autonomy: acquired
In a separate release, HP announced it would buy Autonomy Corporation, a Cambridge-based software company, which also has headquarters in San Francisco, for $US42.11 per share in cash, which Bloomberg reported as a total of $US10.3 billion in cash.

The statement said Autonomy, founded in 1996, had a customer base of more than 25,000 global companies, law firms and public sector agencies. 

“Autonomy’s Intelligent Data Operating Layer (IDOL) platform allows computers to harness the richness of information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice and video.”

Mr Apotheker said in the statement that Autonomy had a strong cloud based solution set, which aligned with HP’s efforts to improve its portfolio mix.

“Together with Autonomy we plan to reinvent how both unstructured and structured data is processed, analyzed, optimized, automated and protected.”

The company said the acquisition of Autonomy would aid HP’s strategy to offer cloud-based solutions and software that “best addresses the changing needs of businesses.”

The company also announced its financial results for the third fiscal quarter, with net revenue of $US31.2 billion, up 1% from the previous year but down 2% when adjusted for the effects of currency.