Silicon Valley granddaddy Hewlett-Packard splits into two entities

The company that became the foundation for Silicon Valley is breaking up. Hewlett-Packard on Sunday officially is splitting into two entities - HP Enterprise, focusing on software and business services, and HP Inc, which will keep the personal computer and printer operations.

The new HP Enterprise will be led by company CEO Meg Whitman and the PC business by Australian native HP executive Dion Weisler. Starting Monday, each will trade separately on the New York Stock Exchange.

The aim is to develop a sharper focus both for the enterprise unit and the PC-printer division that made it a household name but has become fiercely competitive and less lucrative in recent years.

It remains to be seen whether the breakup will revitalize a company that has been in a defensive, restructuring mode for several years as it lost ground to rivals like Chinese PC maker Lenovo, and as tech sector leadership was taken over by mobile-focused Apple and Google.

Founded by two Stanford University graduates in 1939, Hewlett-Packard was an early pioneer of what became the model for Silicon Valley startups. It made hefty profits as it grew into a multinational giant that sold a wide range of computer gear and commercial tech services. But after struggling to keep pace with recent trends like the rise of smartphones and cloud computing. HP's board decided last year to create two smaller companies, each with a narrower focus.

The company has been in transition since dumping the then-chief executive Carly Fiorina in 2005. Fiorina's successor Mark Hurd left in 2010 amid allegations of sexual harassment. Now, it is often seen as a dinosaur overtaken by younger, more dynamic startups.

(Image credit: Economic Times)