A combined PC and printer group at HP would be responsible for a whopping $66 billion in annual revenue. But as drastic as it sounds, this is not a new idea for HP.
Merging the two groups "had been in discussion on and off all the time I was at the company," says Phil McKinney, former vice president and CTO of HP's Personal Systems Group. McKinney left HP in December after nine years.
McKinney didn't have first-hand knowledge of the reorganization that is reportedly taking place today, but he did say this is not the first time the two groups were managed as one unit.
"Carly had merged them at one point and then Hurd un-merged them," he recounts, referring to past CEOs Carly Fiorina and Mark Hurd. "There are pluses and minuses to it. On the plus side, all the consumer products are in one group. The negative is that these are distinctly different products."
McKinney points out that because imaging products are so different from PCs, there's not a lot of "direct leverage" that occurs by combining them into a single structure at HP.
The Personal Systems Group (PSG) generates about $40 billion in revenues annually and the Imaging and Printing Group (IPG) posts $26 billion in revenues.
That's an awful lot of power to be put into the hands of Todd Bradley, who has been Executive Vice President of HP's Personal Systems Group since June 2005. Word is, IPG will report to PSG under Bradley. He was previously CEO of Palm.
HP's relationship with Palm didn't end well. Yet HP points out that during Bradley's term, HP became the No. 1 PC vendor, grew revenues by more than $10 billion and tripled profitability. Now that HP has committed to stay in the PC business, it must figure out how to grow it from here.
Meanwhile year-over-year revenue for the IPG was flat. People are simply printing less than they used to. Photo and file sharing sites are shifting the focus away from ink and paper and into the cloud. Technologies like digital advertising are reducing the need for commercial printing.
Before the reported reorg, HP had seven seven business units: PSG, IPG, Enterprise Servers, Storage and Networking (ESSN), HP Software, HP Financial Services (HPFS) and Corporate Investments.
HP had no comment.
