HP streamlines Enterprise division

SAN FRANCISCO: Computer and printer maker Hewlett-Packard Co. says it would reorganize and streamline its business group that makes computer servers and storage systems for large companies. The company said it would consolidate three units of its Enterprise Systems Group, a move that comes roughly a year after HP acquired rival Compaq Computer.

The three units -- business critical systems, industry-standard servers, which use Intel-compatible microprocessors, and its network storage solutions groups -- will be rolled into one division, called enterprise storage and servers, led by Senior Vice President Scott Stallard.

In addition, HP said the Enterprise Systems Group would create a unit to manage strategy, planning and business operations, as well as a new unit to oversee global customer accounts. "The objective behind this is to accelerate growth," Peter Blackmore, the head of HP's Enterprise Systems Group, said on a conference call to discuss the changes.

Blackmore added that the moves were "not a reflection of any problems but a reflection of opportunities." An HP spokeswoman said the changes are effective immediately. The Enterprise Systems Group had an operating loss of $83 million on revenue of $3.74 billion in the quarter ended Jan. 31, compared with a loss of $129 million in the prior quarter.

Blackmore again backed HP's pledge to return the group to profitability in the second half of the year. He declined to comment if there were any layoffs associated with the changes. HP, for the most part, has held market share in its major product categories since the merger, analysts have said. HP and Dell Computer Corp. have, however, swapped the crown of No. 1 PC maker in recent quarters, depending on the relative seasonal strength of both companies' businesses.

The new business management and operations group will be run by Howard Elias, who had been in charge of HP's network storage solutions unit. Airton Gimenes, currently senior vice president of HP Services, will be responsible for global customer accounts.

"This is part of an ongoing effort to pack down all the dirt related to HP's acquisition of Compaq," said Roger Kay, an analyst at market research firm IDC.

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