Yesterday, Palo Alto, Calif.-based HP Inc. announced it is splitting its 75-year-old technology business into two publicly traded companies: one named after the current corporate entity, and the other named Hewlett-Packard Enterprise.
The split presents a sort of branding double-bind scenario where HP must create two companies that are clearly identifiable with its original brand, but different enough that shareholders, customers, and the public can identify quickly and easily what segment of HP they are dealing with. Current brand HP Inc. will be used for the personal systems and printing business, while Hewlett-Packard Enterprise will be focused on the enterprise technology infrastructure business of software, services, and storage.
Here’s how HP broke down the two new entities in a presentation to investors:
So how did HP decide which half of its split would stick with the current brand versus be assigned a new name? We asked brand experts Cheryl Sylvester, the president of Beyond Success Leadership and ITBusiness.ca community blogger, and Axle Davids, CEO of branding services firm Distility, for their take.
“From a brand equity perspective they are right to continue current branding – the new personal/printing company can continue to leverage the existing equity in the HP brand,” she writes in an email. “This makes sense also as brand plays a larger role in the purchase decision in consumer-facing technology purchases vs. enterprise purchasing which is often more specification based.”
Davids agrees that HP made the right call.
“A short name like HP is also most conducive for the consumer business,” he says. “The square shape of the two letters are ideal for every kind of consumer touchpoint be it a logo on the back of a tablet or the icon for a social media account.”
The HP Inc. brand benefits from consistency – it will use a logo familiar to people because it has been in use since 1981. Since this brand is the one that is consumer facing, people will continue to recognize it on retail store shelves.
As described by HP during its investor presentation, the personal systems and printer company will be about “innovation that will empower people to create, interact and inspire like never before.”
It will be selling products in new areas like 3D printing, and other new computing experiences that aren’t named – but you could speculate wearables will be in the mix.
As for the enterprise company, Hewlett-Packard benefits from an even older brand that originates when the company founders emerged from a California garage in the ’60s. HP last used its full name in its logo in the ’70s.
It will be building upon HP’s investment into servers, storage, networking, converged systems, services and software, according to the investor presentation. It will strive to be “defining the next generation of technology infrastructure, software and services for the new style of IT.”
Tapping the legacy brand is part of the strategy for HP, Sylvester says.
“The legacy aspect of the brand harkens back to the origins of the company… the connection with the historical Hewlett and Packard founders does lend continuity for the enterprise business versus a rebranding effort,” she says. “Establishing a new brand would take considerable investment, but may be appropriate at some point in the future depending on Hewlett-Packard’s offerings and growth, which the company expressly states may include mergers and acquisitions.”
For Davids, the throwback to the company founders is “gold.”
“This is a brand with global brand recognition based on the names of two tremendously respected pioneers in the computing field,” he says. “Sure the brand has slipped in the past few years but to abandon the heritage would be foolish.”
The story goes that Bill Hewlett and Dave Packard flipped a coin to decide who’s name would go first in the company logo. This time around, it looks like HP is leaving things less to chance and has done some clear planning for exactly what its brands communicate.