Hewlett-Packard's decision to retain its vast PC division likely offers some insight into the type of company new CEO Meg Whitman and her team want to lead.
First, they don't want HP to focus on data center hardware and high-margin services and software, like IBM does.
Second, they don't want HP to become tone-deaf like Netflix and make a decision that could cost the company its customers and good will.
Third, they do want to put the turbulence of yet another CEO ouster behind them and let Whitman, less than two months into the job, get her footing without major distractions.
HP generated some $126 billion in revenue last year, and $40.7 billion of that came from its Personal Systems Group, which sells PCs, tablets and other devices.
The company has long touched almost every aspect of IT operations, and it keeps growing by moving deeper into enterprise software through internal development and by acquiring companies like Autonomy, for which it paid more than $10 billion last month.
Whitman's predecessor, Leo Apotheker, had announced in August that HP might move to narrow its focus by selling or spinning off its low-margin PC division to concentrate on software and services.
Analysts and investors heavily criticized the proposal, and a month later, after less than a year on the job, Apotheker was fired and replaced by HP board member and former eBay CEO Whitman.
Rob Enderle, principal analyst at Enderle Group, said the decision to retain the Personal Systems Group makes Whitman look good to users and investors right off the bat. "The spinoff of the PC division made no strategic sense for HP," he said. "There were simply too many dependencies [between the PC group and the rest of the company], and it would have crippled customer loyalty."
Keeping the PC division intact "showcases that [Whitman] makes measured decisions and is difficult to trick into doing something stupid," Enderle added.
Tony Prophet, senior vice president of operations in the PC unit, noted that an internal study found that the move would require about $1.5 billion in one-time costs and additional payments later on.
"As the analysis unfolded, it became clear the costs were much more significant than any potential benefit," said Prophet, a co-leader of the 100-person team of HP executives, customers and legal advisers that studied the plan.
The team also concluded that shuttering the division would unduly harm HP's supply chain, procurement processes and overall brand. "You can be certain that there was deep and thorough analysis," Prophet said.
Had HP abandoned the PC business, the move would have come "just as that whole world is becoming unhinged and lending itself to innovation again," said Frank Gillett, an analyst at Forrester Research.
Gillett cited the coming transition to Microsoft Windows 8, the ongoing evolution of tablets, and the continuing explosive growth of the smartphone business as three good reasons to stay in the personal systems business.
Shah is a reporter for the IDG News Service.