UPDATED October 26, 2011: Learning from the HP TouchPad Fire Sale

Used by permission. CC 2.0.
I'm thinking there may be lessons to be learned from the HP TouchPad fire sale fiasco a few months back and its HPs announcement at that time that it was likely to be exiting the consumer market almost entirely. 
The fire sale itself went badly enough. Yes, HP liquidated their inventory of their soon-to-be-orphaned tablet device in record time. But in the process, the crashes of its own servers and websites and the failures of its call centers to be able to process the traffic of their own fire sale raised real doubts about whether HP could even hold its own in enterprise IT systems.

Well, that was August. And that was under HP's previous CEO, Leo Apotheker. Now we have word that HP's new CEO, Meg Whitman of eBay fame, has announced that HP will definitely continue its PC business.
Why the turnaround on this point?
 Well, it turns out the PC business, despite its relatively low margins in the current markets, remains one of the most profitable divisions of HP. It also turns out that costs to spin it off would be rather steep ($1.5 billion was the estimate) with little guarantee that the newly formed company would be successful against the likes of the already resurgent Lenovo and Dell. That, and having a PC division internal to HP meant HP was in a better position to maintain favorable contracts for their supply chain in their enterprise server business (which they intended all along to continue).

Oh, and one more thing-- that "profitable" PC business was losing market share (to Lenovo and Dell!)  every passing day that its future seemed grim or undetermined.

Low margins, yes... but solid benefits to the company overall, and threats to the company if it were not decisively maintained. 
Whoever has ears...

Peace in Christ,

Taylor Burton-Edwards