Hewlett Packard Enterprise is spinning off and merging its business software assets with Micro Focus. As Fred Katayama reports, it's HPE's latest move to shrink the company.
Hewlett Packard Enterprise is slimming down again. It's spinning off and merging its business software assets with Britain's Micro Focus International in an $8.8 billion deal. The move comes just four months after HPE spun off its computer services unit and merged it with Computer Sciences. It's all part of CEO Meg Whitman's plan to transform the tech giant into a company that focuses on a few key areas: networking, storage, and technology services. The deal was announced the same day that its archrivals, Dell and EMC, completed their merger. Cross Research analyst Shannon Cross said, "This will clearly unlock some value. The use of cash will be important in determining how successfully she (Meg Whitman) has repositioned the company and created value." The deal sends HPE's business software business back to Britain. Hewlett Packard had acquired that business from Autonomy five years ago in what turned out to be a disastrous move, ending in a massive write-off. HPE's shares falling in early trading, while Micro Focus' shares soared.