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Friday, 19 August 2016

After the split: so is it HP, Hewlett Packard, Hewlett Packard Enterprise or what?


Sometimes this Kat is puzzled by the selection of a company name (or names) after a corporate split, spin-off or acquisition. This Kat has
previously shared his bemusement over the selection of the corporate name, Mondelēz International, adopted in 2012 in connection with the spin-off of Kraft Food’s global snack and food brands (as reported on Wikipedia, it “… was suggested by Kraft Foods employees and is a combination of the words for "world" and "delicious" in Romance languages”). Uncertain in its pronunciation and difficult to store in one’s long-term memory, this Kat still wonders. One thing, however, can be said in defense of Mondelēz, after sorting out what the company name refers to, there is never any confusion between it and any other Kraft (or indeed any other) entity. The same cannot necessarily be said about the company names that were selected in connection with the 2015 split of the once-known Hewlett-Packard Company.

In that connection, this Kat recently met an acquaintance, who has a long-time connection with the company. Over a cup of coffee, this Kat innocently asked: “So which HP company do you now work for. And who is running the company”? My acquaintance fumbled his response to both questions, before ultimately coming up with the correct answers. As Kat readers may be aware, the former Hewlett-Packard Company has split into two separate companies. The then existing company changed its name to HP Inc. and retained the company’s personal computer and legacy business (with its ticker remaining HPQ), while a new company was created, called Hewlett Packard Enterprise Co. (with its ticker symbol “HPE”) and consisting of four divisions—Enterprise Group, Services, and Software and Financial Services. In May 2016, it was announced that Hewlett Packard Enterprise would sell its Enterprise Services division to Computer Sciences Corporation. This transaction is to be completed by March 2017; in the meantime, it does not appear that a name has been chosen for this new company.

So what we have is that the existing company has discarded the name Hewlett-Packard Company in favor of HP Inc. (“HP” being a name and mark long associated with the company). The second company is called Hewlett Packard Enterprise Company. (Kat readers will carefully note that the hyphen between Hewlett and Packard has been discarded, and its full presentation, it also includes a logo in the outline form of a green rectangle.) The two companies still both roughly share the Hewlett-Packard nomenclature history.

But it does not have to be this way. Consider Accenture, by some metrics the world’s largest consulting company. Accenture began as the business and technology division of the accounting firm Arthur Andersen and then became known as Andersen Consulting. Tension between the consulting and accounting practices led Andersen Consulting to change its name in 2001 to Accenture. In that same year, the Enron scandal broke, implicating Andersen Accounting and leading to its virtual demise. While the Andersen name will forever be associated with the Enron scandal, Accenture (no whiff of the word “Andersen” in its name) was recently recognized by Fortune magazine among the world’s most admired information technology services companies.

For sure, there may have been a bit of luck involved, since one of the terms of the arbitration award in the dispute between the two companies was that the latter could no longer use the Andersen name—leading to Accenture. But it also points to the risk in sharing a common name, when the two entities are separate and independent, and each goes off in its own business direction. One wonders how Andersen Consulting would have played out if it had retained the name Andersen as the accounting company was being dragged through the mud of Enron.

Regarding Hewlett Packard Enterprise (or HP or HPE or whatever), the issue is in no way connected to negative spill-overs, such as Enron, but rather what kind of corporate identities are being created. Truth be told, trying to keep straight the two companies by name and fields of activity is a constant challenge. One gets the sense that, at least for the moment, those concerned at the two companies seem to want a bit of confusion in their identities. Consider the following, which appears on the Hewlett Packard Enterprise website--
“Hewlett Packard has been in the innovation business for more than 75 years. Our vast intellectual property portfolio and global research and development capabilities are part of an innovation roadmap designed to help organizations of all sizes – from global enterprises to local startups – transition from traditional technology platforms to the IT systems of the future.”
Even after the split, what seems most important is that the two companies both continue to recall their common Hewlett Packard heritage, in haec verba. Whether this is an effective naming strategy in the longer term will remain to be seen.

10 comments:

Anonymous said...

Both Volvo and Saab did the same thing.

Anonymous said...

I thought HP was a sauce company!

Kant said...

With "was" being the correct tense, now made by Heinz in the Netherlands.

Ron said...

But rather ironically, no longer has a description of its quality in French on one side of the label, for which it was well known from at least the late 1950's. It even got an anonymous mention (the old BBC had strict rules on the use of trade names for fear of being accused of advertising) in one of the "Hancock" radio shows, where Bill Kerr speaks a few words of French and admits to Hancock that he got it from the side of a sauce bottle.

Anonymous said...

Neil, I think you're missing a part of the story. In my opinion, the goodwill of both these "HP" entities is usurped.

Back in 1939, William Hewlett developed in his Palo Alto garage what was to become the first product of the real Hewlett-Packard, the 200A audio oscillator. One of their inaugural customers was Disney's sound department.

In the next 5 decades the company was mostly a household name to geeky types with their slide rules and pocket protectors. HP had a sterling reputation for first rate engineering, and top of the line specifications, although the initials were also taken to mean "High Price" (I would sometimes muse about the number of town houses one could buy with the HP gizmos stacked on my lab bench). Reading the HP Technical Journal was a lesson in how to design stuff, and the HP catalogue was way more exciting than anything that Sears-Roebuck could ever put out. (I'm exaggerating slightly, but you get the idea).

In the 1990s HP became (much) more consumer oriented, with printers, scanners, as well as Wintel-desktops and laptops. A lot of it was generic ho-hum stuff. After a number of very unhappy purchases I came to avoid the HP brand for these products.

The nerdy stuff (test and measurement equipment; medical apparatus) was eventually spun-off in 1999 to a separate company called "Agilent". More recently, Agilent itself was split. It kept the medical products, but the T&M equipment (which originally made HP's fortune and reputation) was spun-off to yet another entity called "Keysight".

So what is the brand "HP" or "Hewlett Packard" supposed to mean today?

A Nonni Mouse said...

Of course it can also work the other way. Once there was a UK "General Electric Company" and US "General Electric" which were completely unrelated. In a blaze of publicity the UK version changed its name to Marconi and became a telecoms company at the height of the dotcom bubble. It publically relinquished the General Electric name to GE and promptly imploded, finally ending up as a tiny company laying cables.

I don't know what happened to GE, are they still around?

Anonymous said...

Once there was a UK "General Electric Company" and US "General Electric" which were completely unrelated.

There was an AEG (Allgemeine Elektrizität Gesellschaft) and a CGE (Compagnie d'Électricité) as well. Both mean exactly GE in German and French respectively.

AEG was however an Edison creation, so it's somehow connected to GE (US).

GEC finally disappeared about 10 years ago. The Marconi trademark belongs to Ericsson, an arch-rival in a few fields. :-(

Anonymous said...

Arthur AndersEn not AndersOn

Neil Wilkof said...

Anonymous @ 9:17 BST, Thanks for the correction.

Ron said...

GE and GEC used to be joint (50-50) owners of General Domestic Appliances, who uses to manufacture (in the UK) domestic white goods under brands such as Hotpoint and Creda. GEC sold their half to GE when their senior management got mesmerized by dot.com madness, but GE sold the brands on, and manufacturing has now moved to mainland Europe.

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