By Robert McMillan, Staff Writer, WSJ / Wall Street Journal:

Hewlett-Packard CEO Meg Whitman’s decision to divide in two arose from the company’s struggles through much of the past decade with declining revenue, corporate scandals and management changes. H-P stood on the sidelines as companies such as Inc. and Apple Inc. created compelling cloud computing, smartphone and tablet businesses. In the end, H-P’s size worked against it, Ms. Whitman said in an interview last week. “We needed to be smaller, more nimble, we needed to be more focused,” she said. “And we needed to have a capital structure for each company that would allow them to pursue their objectives.”

“Acquisitions have got to be a part of the future of Hewlett Packard Enterprise,” she said. “This market’s moving too fast.”

Some industry analysts believe that H-P’s server, storage and networking businesses have better long-term prospects than its PC and printer groups. Moreover, the split also could revive talks between Ms. Whitman and executives at EMC Corp., said Jim Osman, CEO of Edge Consulting Group, an equity research firm that specializes in spinoffs. H-P and EMC held off-and-on merger talks last year.

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