Hewlett-Packard Enterprise will spin off its enterprise services business and merge it with IT services company CSC in a surprise move announced Tuesday. 

HPE said the “spin-merger” would create a pure-play IT services company with US$26 billion in annual revenue. It expects to close the deal by March 2017.

It’s the latest step in an effort to turn around one of Silicon Valley’s oldest companies. Just last year, Hewlett-Packard split itself into two vendors, with HPE selling data center products and services, and HP Inc. selling PCs.

Now, HPE is slicing itself up further, betting again that a smaller core company will be able to move faster and attract new business in a world increasingly dominated by the cloud.

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