US Air Force Still Buys HP Products Amid Spin-Off Plans

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HP is in a precarious position lately, having announced plans to spin off its Personal Systems Group. But even so, big customers continue patronizing the company and buying its products — one of them the United States Air Force.

The US Air Force has recently announced that it will push through with its plans to acquire new workstations from HP, including the Z800, which uses Intel processors and has 192 GB of memory and 10 TB of storage each. This involves a deal worth as much as US$ 800 million in the next five years. The Air Force says they are confident in HP’s continued support amid plans to spin-off its hardware division, noting that they have been loyal customers for the past five years, with about 900,000 workstation units bought so far.

Business analysts say HP’s planned spin-off is not likely to affect any government decision-making when it comes to hardware purchases, and believe that there will be continuity much like with other major mergers and acquisitions in the industry. But even with the support of a big customer like the Air Force, these big clients are HP’s target market for enterprise services, anyway, and big-ticket procurement contracts often take some time fulfill.

The question is whether HP can still maintain mindshare and trust among regular PC-buying customers when there is still no definite plan for their hardware business in the near future. Also, the Air Force approved the deal in July, but has only recently made their announcement of support. Would the US government and its agencies pursue new procurement plans with HP at this point, or will everyone have to wait until the dust settles and the company gets more definite plans for its hardware business?