IBM: The All-In Acquisition Bet
International Business Machines (IBM) offers a compelling parallel to HPE’s strategy of making bold acquisitions to reshape its future. For decades, IBM was a synonym for mainframe computing. But to pivot toward the lucrative hybrid cloud market, it made
a colossal $34 billion bet on acquiring Red Hat. This wasn't just buying a company; it was buying a new identity. The move mirrors HPE’s aggressive acquisitions, like its purchase of Juniper Networks, to accelerate its push into high-growth areas like AI-native networking. Studying IBM reveals the high-stakes risks and rewards of using a landmark acquisition to steer a legacy behemoth away from its past and into a new competitive arena. It's a masterclass in how to spend big to change your story.
Dell Technologies: The Financial Engineering Saga
If HPE’s story is about a strategic split, Dell’s is about a dramatic reassembly and subsequent streamlining. In 2016, Dell executed the largest tech acquisition in history, buying EMC (which owned a majority stake in VMware) for $67 billion to become an enterprise powerhouse. This followed Michael Dell taking the company private in a massive leveraged buyout. Then, in 2021, Dell spun off its controlling stake in VMware to unlock value and pay down debt. This journey of going private, making a gigantic acquisition, and then strategically spinning off a key asset is a fascinating example of financial engineering used to redefine a company’s focus. For those intrigued by HPE's split, Dell's saga shows the other side of the coin: a bold consolidation followed by a strategic separation.
Cisco Systems: The Hardware-to-Software Grind
Cisco, the long-reigning king of networking hardware, is on a multi-year quest that should feel very familiar to HPE observers: the slow, difficult transition from selling boxes to selling software and subscriptions. For years, Cisco’s business model was based on selling routers and switches. But as the value shifted to cloud-based services and intelligent networks, Cisco has been aggressively pushing into software, security, and recurring revenue streams. This pivot is challenging, as it requires changing a decades-old sales culture and competing with nimble, cloud-native firms. Like HPE, which is transitioning toward its GreenLake consumption-based model, Cisco’s journey is a case study in how a dominant hardware company attempts to reinvent itself for a software-defined world.
Oracle: The Slow-Burn Cloud Transformation
Oracle’s story is one of relentless, brute-force transformation. As a legacy giant in on-premise databases and business software, Oracle was famously late to the cloud computing party. However, it has since been engaged in an expensive and determined campaign to build its own cloud infrastructure (OCI) from the ground up to compete with giants like AWS and Microsoft. The strategy involves migrating its massive existing customer base to its cloud applications while expanding its data center footprint globally. Like HPE, Oracle is leveraging its deep enterprise relationships to drive a transition to a new model. Its journey demonstrates the sheer willpower and capital required for an entrenched market leader to pivot and fight for relevance in a new technological paradigm it didn't invent.
Kyndryl: The Spin-Off Sibling
To understand HPE's journey, there's no better company to watch than Kyndryl, the managed IT infrastructure business spun off from IBM in late 2021. Much like HPE was separated from HP's consumer-facing printer and PC business, Kyndryl was carved out of IBM to allow both companies to focus on their core strengths. Kyndryl began its independent life with a huge customer base but also declining revenues and low-margin contracts inherited from its parent company. Its story since the split has been one of turnaround and reinvention—shedding unprofitable business, forming new partnerships with companies beyond IBM (including its cloud competitors), and investing in higher-value services. Watching Kyndryl is like watching the HPE origin story play out in real-time, offering a direct look at the challenges and opportunities that come with newfound corporate independence.
