It seems each week we are hearing about a new corporate giant breaking up its business into smaller companies or splitting away an internal business to show a value-add to its consumers and partners.
Here is a quick overview of the latest rounds of Silicon Valley Breakups and how they will try to live on their own. You have to ask yourself, are their larger sharks circling looking to pick up the pieces?
One of the giants in the security space for both consumer and enterprise products decided to divide its offerings into two pieces: a $4.2 billion security business and a $2.5 billion information management business. Much of Symantec’s information management capabilities came from a 2005 acquisition of VERITAS Software Corp.
CRN1 magazine, noted the following: “Separating Symantec into two, independent publicly traded companies will provide each business the flexibility and focus to drive growth and enhance shareholder value,” says Michael Brown, president and CEO of Symantec, Mountain View, Calif., in the statement. “As the security and storage industries continue to change at an accelerating pace, Symantec’s security and IM businesses each face unique market opportunities and challenges. It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to-market innovation.”
It has also been reported that Cisco is keeping a close eye on the security part of this breakup. We will see if they decide to bite. This purchase could make a good deal for the security breakup as well as adding a large addition to the giant portfolio that Cisco holds.
HP also decided to split into two $56 billion powerhouses. This split will create more stress with competitors as the HP Enterprise machine drives innovation into enterprise systems, software and services, while HP Inc. will take on the company’s personal systems and printing business and will also retain the current HP branding and logo.
eBay has jumped ahead of its plans, spinning off its online payment service PayPal as a separate company. (The company had originally planned to spin off PayPal in 2015.) PayPal sees this as an opportunity to develop new digital payment features with partners and OEMs on a global scale.
In addition to bolstering the brand, it will allow the firm to take advantage of opportunities being created by the quickly evolving mobile electronic payment models that are currently being discussed by giants such as Apple and Samsung. It was reported by CRN that the current CEO of eBay will be stepping down when the spinoff is complete.
IBM has had a busy year with the purchase of Fiberlink’s MaaS360 mobile device management platform and moving forward with the final details of the consolidation into its giant footprint of technology. In a move that was reported earlier, IBM has finished the plans for the split of its x86 enterprise server organization and handing it over to Lenovo. That is if $2.1 billion can be considered a handoff – even in complex terms.
In addition, on Monday IBM announced an agreement to hand over its semiconductor business to GlobalFoundries. According to USA Today, IBM will pay GlobalFoundries $1.5 billion in cash, and will take a pre-tax charge of $4.7 billion for the third quarter. IBM will maintain a stake in chip research.
More of a product split in this one. CA Technologies has split away its Arcserve product that is used in many enterprises for data backup and recovery. First sold under the brand name Cheyenne Software, CA has not decided to spin-off Arcserve into a freestanding company. Not all the details are available yet. So watch the boards to see how this will turn out.
This one may be a bit long in the tooth in the news centers. However, Cisco has completed its split of the Linksys brand and handed it over to Belkin. The Linksys brand has had an up and down rollercoaster ride through the years, before and after the Cisco purchase.
Belkin reports this as a huge investment for them as they have added on a channel partner brand around Linksys. The networking products will continue to be sold under the Linksys logo in both consumer and enterprise channels.
So what’s next? Which one will be the next to split? Right now it seems to be a race between enterprise companies and the state of California itself. Will we see the creation of the Great State of Silicon Valley?
1 Robert Westervelt, Symantec Security, Storage Breakup Has Partners Holding Breath, CRN, October 2014