Well, that didn’t take long. There was a rumor this afternoon, and by tonight Hewlett Packard Enterprise confirmed it is throwing in the towel. To be more specific, HPE is practically giving its corporate IT business to Computer Sciences Corp. This is not really the spinoff that the press release suggests, but a spinoff in the sense of Nokia spinning off its handset business. The corporate services business was the “Enterprise” in Hewlett Packard Enterprise and was expected to be the heart of the company when it split from Hewlett-Packard Inc. and the printer business on November 1. Corporate IT is stumbling in general, with industry leader IBM showing revenue declines year after year, and HPE was not the company to pick up the pieces.
This is a face-saving deal for a company that has fumbled its way from one experiment to the next since the dot-com bubble of 1999. What is left of Hewlett Packard Enterprise will focus on its cloud business, with network components to sell so the company won’t be purely an experiment in unproven technology. Cloud services should keep the lights on at HPE for the next few years until the cloud fad loses its sparkle. The long-term trend, though, is for HPE to get smaller and smaller, and there is nothing in the latest news to suggest that could change.