Five tech companies that split in half (and a big one that was nearly forced to)
After Symantec announced it would be splitting up its consumer and enterprise arms, we assess how other tech companies taking a similar approach have fared
Last week Symantec announced that it will be splitting in two, with its enterprise unit being sold off to Broadcom, along with the Symantec brand.
Symantec is not the first tech titan to split itself in half in order to boost its numbers or placate angry investors.
Here we profile five vendors to have taken this step, and assess how the bold moved turned out for them.
Symantec (twice)
After a months of rumours, Symantec finally announced a deal with Broadcom last week, but it was not the one most expected.
Initial murmurs had suggested that Broadcom would swallow the whole of Symantec, but talks reportedly broke down after the two vendors could not agree on a valuation.
Instead, it was confirmed that Broadcom would acquire Symantec's enterprise business, and the Symantec name with it, leaving behind the consumer Norton business.
This move cuts the Symantec business almost straight down the middle.
Symantec's enterprise division generated sales of $611m (£504m) in its last fiscal year, with the consumer arm bringing in $636m.
This is not the first time Symantec has cut itself in two.
In 2016, it completed the sale of information management arm Veritas, which it acquired in 2004.
This move was not quite as even a split as the latest one, with security revenue in its last year as a combined company just under $4bn and Veritas' revenue $2.8bn. It did however see Symantec sell off one of its two focus areas, leaving it with just cybersecurity.
Article continues on next page
Five tech companies that split in half (and a big one that was nearly forced to)
After Symantec announced it would be splitting up its consumer and enterprise arms, we assess how other tech companies taking a similar approach have fared
Motorola
Motorola is perhaps best known (by millennials, at least) for its snazzy pre-iPhone flip phones. But it wasn't just the Moto Razr that contributed to its near-$20bn sales.
In 2010, the business decided that it wasn't showcasing the true breadth of its portfolio well enough to investors, and decided to split into two distinct operations.
At the start of 2011, it became Motorola Mobility (focusing on mobile phones) and Motorola Solutions (professional technology).
Essentially, it parted its consumer business from its enterprise business, with both listed separately on the New York Stock Exchange.
The move was over two years in the making and was driven by activist investor Carl Icahn.
In the full year proceeding the break-up, the Mobility arm had sales of $11.5bn, while Solutions was at $7.6bn.
The move caused publicity confusion, with Solutions boss Greg Brown (who had also helmed the combined business), claiming he would see media reports citing the "Motorola CEO", but not know who was being spoken of.
This lack of clarity did not last long, with Google announcing it would acquire Mobility that same year, for $12.5bn.
Under Google's ownership Motorola saw its market share recover to some extent, as the Android operating system squared up to Apple's iOS.
Google flogged the unprofitable unit to Lenovo for $2.91bn in 2014, retaining its Advanced Technology unit and a chunk of its patents. Lenovo now sells smartphones under the Motorola brand.
Motorola Solutions, meanwhile, is still listed on the New York Stock Exchange and has seen its share price climb more than 300 per cent since the start of 2011.
Article continues on next page
Five tech companies that split in half (and a big one that was nearly forced to)
After Symantec announced it would be splitting up its consumer and enterprise arms, we assess how other tech companies taking a similar approach have fared
HP and HPE
Meg Whitman presided over the largest corporate split in history in 2015, when the once-dominant Hewlett-Packard was cut in two, having struggled to stay innovative as cloud computing and other emerging technologies threatened its business model.
In its last year as one company, the vendor saw sales tumble seven per cent to $4.6bn.
Hewlett-Packard was split into the PC and print-focused HP Inc, and datacentre-focused Hewlett Packard Enterprise (HPE).
Both suffered from teething problems in the months following the separation, and HPE continued to shrink - flogging its sizable software and services arms.
Cost-saving initiatives were announced by both businesses, including multiple rounds of layoffs, while early quarterly numbers disappointed.
The two vendors also found themselves the subject of many jokes from Michael Dell, who accused them of "trying to shrink to success" as he masterminded his colossal takeover of EMC.
But the tide started to turn as both focused on innovation. HP Inc has released a batch of stylist laptops post-split, acquired Samsung's print business and pushed further into device-as-a-service with the acquisition of Apogee.
HPE, meanwhile, has acquired Nimble Storage and SimpliVity, among others, and was praised by the channel at its recent partner conference for moving faster than ever. However, it still faces challenges, particularly with regards to server sales.
HPE has a market cap of $18bn, with HP Inc valued at just under $30bn.
Article continues on next page
Five tech companies that split in half (and a big one that was nearly forced to)
After Symantec announced it would be splitting up its consumer and enterprise arms, we assess how other tech companies taking a similar approach have fared
eBay and PayPal
Carl Icahn appears to be a theme of this article, and was the driving force behind eBay's split from PayPal in 2015.
The move was first announced in September 2014 after behind-the-scenes work from Icahn and just months after eBay pledged that the two companies would stay as one.
eBay had hit sales of $9.9bn over the previous 12 months, with PayPal sales at $7.2bn.
The split took longer than expected and was only finalised in July 2015 when PayPal was listed on the NASDAQ market.
PayPal has thrived since stepping out of eBay's shadow, with its share price more than doubling in the four years since. Its fiscal year 2018 revenue was $15.45bn and it is currently valued at $124bn.
eBay's journey has been more bumpy, with its share price rising above and below its pre-split valuation multiple times. Its $34.37bn valuation is dwarfed by PayPal's.
An end to the long relationship between the pair was announced last year, when eBay said it would dump PayPal for Dutch competitor Adyen.
Article continues on next page
Five tech companies that split in half (and a big one that was nearly forced to)
After Symantec announced it would be splitting up its consumer and enterprise arms, we assess how other tech companies taking a similar approach have fared
Xerox and Conduent
Yet another Icahn masterplan, Xerox said that it would spin off its business process outsourcing (BPO) business from the document solutions arm that made it famous, in January 2016.
The split was completed a year later, with the BPO company listed on the New York Stock Exchange as Conduent.
Both companies have struggled since. Conduent's share price has tanked more than 58 per cent post-separation, although it has made some divestitures.
Xerox's valuation, meanwhile, has stayed flat - but Icahn has continued to meddle.
The print vendor was plunged into chaos last year, when activist investors forced it to abandon its merger with Fujifilm, via an existing joint venture.
Xerox's CEO was bizarrely ousted, reinstated, and then finally fired in a crazy month for the firm.
Article continues on next page
Five tech companies that split in half (and a big one that was nearly forced to)
After Symantec announced it would be splitting up its consumer and enterprise arms, we assess how other tech companies taking a similar approach have fared
Microsoft (almost)
The tech landscape as we know it could have been very different if Microsoft had been forced to accept the orders of a judge in June 2000.
The vendor, which was at this point still riding its first wave, was ordered to cut itself in two after being found to have an unfair monopoly on the fledgling software market.
Microsoft was accused of illegally hampering its competitors by including software programs such as Internet Explorer with its Windows operating system - and making it difficult to remove them.
A US judge found that Microsoft's actions were unfairly suppressing the search engine programs and other applications of other manufacturers.
The decision was eventually overturned by appeal, partly because the judge had violated the code of conduct by offering interviews while he was still hearing the case.
Microsoft was eventually ordered to share its APIs with third parties and appoint an independent panel to oversee its conduct for five years, despite a number of protestations.