When large companies act, they don't do it in a vacuum. So you'd have to assume that Hewlett-Packard
The new HP
HP just created a whole new business unit out of fresh EDS services and a few old scraps. The new communications and media solutions (CMS) segment puts all of HP's products for media and telecom providers under one virtual roof. Unlike the former communications, media, and entertainment unit, CMS is a reportable segment that is expected to report operating earnings on its own.
"That which you measure is what you do," as HP spokeswoman Joy King told Telephony Online. "Service providers don't buy products today -- they buy solutions." So it makes sense to package HP's sprawling telecom and media assets under a recognizable umbrella, bolstered by EDS support services.
This move should make HP more nimble than top rivals IBM
This is a smart move. For one, it positions HP to play a larger role in the digital media revolution. If a vertically integrated solutions package helps HP win more contracts with service providers like Verizon
The next HP
But that's not all. If HP is prepared to make sweeping organizational changes in the media segment, then what's to stop it from bundling up other departments with a new focus on customer markets rather than products? Nothing at all. For example, HP is big in the hotels and resorts industry, and already helps sector giants like Marriott
In the end, HP might be advised to split up into a handful of specialist companies. I'd love to pick and choose which parts of HP to invest in, so bring it on! In the meantime, shareholders should enjoy the sharper focus on measurable media goals.
Further Foolish speculation:
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.