HP is betting that hybrid work is here to stay – Yahoo Finance
HP (HPQ) announced it would buy office headset-maker Poly (POLY) for $3.3 billion last week. It’s a big-ticket deal for a company that’s on the lookout for its next chapter.
In recent memory, dealmaking has been inextricably tied to the old guard tech giant and its prospects but when the COVID-19 pandemic hit, everything changed. In 2020, Xerox (XRX) withdrew its offer to buy HP after a months-long, TV-worthy drama that involved threats of a hostile takeover, a poison pill plan, and activist investor Carl Icahn.
HP has since pursued its own deals, some of which have been bets on hybrid work. In July 2021, HP bought remote computing software provider Teradici. In the release at the time, HP touted hybrid working-related projections by Fortune Business Insights, which estimated that the remote desktop software segment will grow at a “17% compound annual growth rate through 2028.”
So the Poly deal wasn’t a surprise, but what is perhaps more noteworthy is the extent of HP’s faith in the permanence of hybrid work. The company believes that hybrid work has staying power because the pandemic has irrevocably shifted the roles our homes and offices play in our lives, said Alex Cho, president of Personal Systems at HP.
“We used to leave our houses to work, learn, go to the movies, or get care,” Cho told Yahoo Finance in an email. “Today, those things are being done more from home through digital experiences… As a result, people will work more from home, and we are seeing both people and companies investing in those spaces. More people will also onboard with new employers without ever stepping foot ‘on campus.’”
That’s not to say HP believes offices will go away — what will change is how those offices are used. The era of the all-day, everyday office is over, according to Cho.
“Companies are investing to transform office spaces into centers of culture, community, and collaboration — making them places we go to for a specific purpose rather than where we spend most working hours,” he said.
While HP’s hybrid-work bet could pay off, there’s a debate surrounding return-to-office within the tech industry. Recently, Apple employees have reportedly protested over the company’s return-to-work plan, while Google and Microsoft have started easing employees back to their offices, according to CNBC.
A conference attendee walks by the HP logo. REUTERS/Jim Young.
Peripherals-type of acquisitions
There are, in a sense, two HPs — HPQ and Hewlett Packard Enterprise (HPE), a byproduct of the company’s 2015 split of its business. The former retained the famed PC and printer business while the latter took on the enterprise computing, storage, and networking hardware businesses.
Now, for HPQ, the pandemic set off a wave of personal computer purchases, reversing a decade of declines in the segment, but that boon isn’t enough to ensure the company’s future. “I’ve been vocal about the fact this company needs something else other than PC unit growth to drive the next wave of overall growth in the business,” Jefferies analyst Kyle McNealy told Yahoo Finance.
HP accordingly has been exploring other avenues of growth, many of which have also translated to deals. In February 2021, the company acquired gaming accessories-maker HyperX from Kingston Technology. Like Poly, the deal emphasizes peripherals and auxiliary products that add to a computer’…….