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Analysts: HPE service spin off will have minimal channel impact

There will be minimal impact on Hewlett Packard Enterprise channel partners with the spin off of the vendor’s Enterprise Services division and merger with Computer Sciences Corp., announced this week, according to industry watchers.

Somewhat in synch with Dell’s $3.9 billion purchase of Perot Systems in 2009 and March 2016 agreement to sell Perot Systems to NTT Data of Japan for about $3.1 billion, Hewlett Packard agreed in 2008 to a $13.9 billion acquisition of EDS and Hewlett Packard Enterprise (HPE) will now sell the Enterprise Services division in an $8.5 billion transaction. The transaction completion target date is March 2017.

The new combined company, the name of which has yet to be revealed, will be a pure-play global IT services company with Mike Lawrie as chairman, president and CEO. Meg Whitman, HPE’s CEO, will join the board. Lawrie was appointed president and CEO of Computer Sciences Corp. (CSC) in 2012 with the goal of transforming to cloud, digital and next generation technology.

With one less distraction for the recently formed HPE, Whitman said, in a prepared statement, that the spin off “allows a standalone HPE to further sharpen its leadership in building the vital end-to-end infrastructure solutions necessary to power the enterprise cloud and mobility revolutions.”

But how exactly might HPE’s bread-and-butter channel partners benefit from the spin off of the Enterprise Services division?

Cyndi Privett, principal at ViewPoint Research, noted that the enterprise services business never really had a well-articulated channel strategy for engaging the vendor’s traditional partners. “They [Enterprise Services] were like an island at the company. They weren’t a part of technical services that does day-to-day services or deployment services…I see this spin off as not particularly impactful to HPE’s traditional server, storage and networking focused channel partners,” she said.

Both Privett and IDC’s Gard Little, a research director covering CSC, do view the spin off as potentially good news for HPE’s ability to partner more with large systems integrators such as Accenture and Deloitte, companies that viewed the vendor’s Enterprise Services business as a competitor.

At the end of the day, the recently announced deal is good for stakeholders and customers but not so much for HPE’s traditional partners, said Little.

Time will tell.

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