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HP has reversed the unpopular, hastily considered, board of directors-blessed decision to dump its $40 billion PC unit that its now purged CEO Leo Apotheker announced in August.

The company said Thursday afternoon right after Wall Street closed that it would keep the business, expecting it to “deliver greater customer and shareholder value.”

The new decision has the “full support of the board,” a statement that only gives HP’s much vilified board another black eye.

Ostensibly HP did an “objective” evaluation of strategic alternatives for its Personal Systems Group (PSG), an exercise that reportedly involved about 100 “subject matter experts across the businesses and functions,” 18 teams that supposedly looked at all the angles of spinning the unit off.

Under the circumstances one might suspect that the findings were pre-ordained but the investigation reportedly calculated that a spin-out would run about $1.5 billion in start-up costs.

In a statement Apotheker’s replacement Meg Whitman – who, remember, signed off on the August plan – said, “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. HP is committed to PSG, and together we are stronger.” A schoolgirl could have figured that out.

Sources have whispered that the only reason HP ever thought about dumping PSG was to cover the $10+ billion it cost to buy the equally unpopular and expensive British ISV Autonomy. There was no one to buy PSG for more than $10 billion and that led HP to fall back on the cover story that it was thinking of spinning the unit out as a standalone company despite the sacrifice of the synergies it gets from the thing.

It is now reckoned that the loss of purchasing power and joint brand opportunities would have cost another billion dollars.

The Wall Street Journal said the total cost of a spin-out was originally only supposed to be $300 million-$400 million. Where that figure dropped from is unclear.

In a press release ahead of a conference call HP said, “The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.

“The outcome of this exercise reaffirms HP’s model and the value for its customers and shareholders. PSG is a key component of HP’s strategy to deliver higher value, lasting relationships with consumers, small and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP’s business.”

Todd Bradley, who was on the conference call, will apparently continue to run PSG. Although PSG miraculously lost no market share in Q3, he still has to deal with the August 18 hangover. In answer to a question, Meg said she was confident HP would get its “fair share or more” of disk drives out of poor waterlogged Thailand because of its size and long-term relationships.

Whitman is giving the company another couple of months to figure out what to do with webOS. Apparently it’s seen as some cross-organization something or another but unlikely to return inside a tablet. HP wants Windows 8 for tablets.

HP made back a pittance of its squandered wealth Thursday. Its stock rose to $26.99, up $1.24 or 4.82%, on a day when the market surged. Before the August 18 announcement HP was at $31, down more than a third from its glory days under Mark Hurd.

Meanwhile, Meg – or her people – are trying to reduce the “what is HP” question to a bumper sticker. She said it had to be right because the company will have to execute against it. Before that she’s got to make Q4 guidance. The numbers are due out next month. By then she needs guidance for 2012. She said, “HP tries to do a lot of things.” She, on the other hand, is “a big believer in doing a small set of things really, really well.”

The stock market in New York was closed all of five minutes Thursday when HP’s board announced that it had striped Léo Apotheker of his epaulets and swagger stick and named Meg Whitman president and chief executive officer.

In an unexpected move, Ray Lane, who put Whitman on the HP board in January, was named the company’s executive chairman. As non-executive chairman, Lane was very much the power behind Apotheker’s throne. Now apparently he will be Meg’s Gray Eminence. He said he was there “to support Meg,” same thing he said about Apotheker.

The two are close because Lane helped Whitman out when she ran into problems at eBay according to what some Yale guy said on CNBC. At least they know each other as customer and vendor from the days when she was at eBay and he was at Oracle.

The change in Lane’s status, which is likely to be remarked on at some point by Lane’s old boss, Oracle CEO Larry Ellison, more closely resembles the speculation last week that Lane would get the CEO job when Léo fell and in fact Lane admitted during the conference call that followed the announcement that he had considered stepping into the slot on an interim basis.

Lane said he had found “weaknesses in parts of the business” and that Léo was let go because of poor execution, failed leadership, lack of understanding HP’s various businesses except on a cursory level, and poor communications skills, which culminated in the disastrous August 18 announcement that HP would spin out or sell off its PC unit, abort its nascent drive into webOS-based tablets and smartphones, and buy Autonomy for a king’s ransom.

Since the board blessed the plans, it’s not backing off them, which is why HP’s stock was down again after-hours to $22.60 after Wall Street plunged a very nasty 4% during the session.

Investors don’t want to hear that the board is indecisive about what to do with the company’s giant $41 billion PC arm. Delay is losing business and HP CFO Cathie Lesjak got on the horn long enough to say revenues this quarter would be worse than the $32.1 billion-$32.5 billion Léo predicted in August when estimates were for $34 billion but by some financial gymnastics HP will still make his predicted ESP of $1.12 to $1.16 compared to estimates of $1.31.

Although Lane has now decided that HP is a hardware company – something else he said Léo didn’t realize – the best he and Meg could do was promise a decision on the PC unit by the end of the calendar year. Betcha they decide to keep it. Betcha they say so in a few weeks.

In another slap at Apotheker, Lane said he had banished the word “transform” from the HP lexicon. “We will have more services and software but we’re a $120 billion hardware company.”

Insiders claim the only reason HP is sticking by the fatal August 18 strategy is that Lane was part of the troika that included Léo and chief strategy and technology officer Shane Robison that reportedly persuaded the board to rubberstamp the plan.

Meanwhile, it’s still quite possible that dissonant shareholders who have lost half their money since HP tossed out Mark Hurd may make a bid to dump the whole board and substitute their own slate. That slate may then make some management changes. They’ll have to live with the Autonomy acquisition. HP can’t get out of it and it should close by the end of the calendar year.

Whitman pledged to turn things around and mend fences with the investment community, but said it would take time to rebuild confidence. She has met with HP’s Executive Council to discuss how they will work together and boost employee morale. “The organization’s been through a lot,” she said.

There are of course widespread doubts about Meg’s skills and her purely consumer background, her inability to grow eBay passed the $7 billion mark, and her pricey acquisition of Skype for $2.5 billion which ultimately forced eBay into a $1.4 billion write-off. Skype now belongs to Microsoft.

Lane bushed aside the issue of Whitman’s hasty appointment and said he was acquainted with all the candidates and there’s none better. Possible insiders aren’t ready and Meg apparently presented him with a plan for the next six month and the next year.

In answer to questions about the board itself he said it’s not the pretexting board or the board that fired Hurd or the board that hired Apotheker. He saw to that in January by bringing in five new people and getting rid of four troublemakers. He never dealt with the fact that it is the board that sanctioned the August 18 plan and okayed the Autonomy acquisition.

Bloomberg claimed that Apotheker was blithely unaware that he was about to lose his job until Wednesday when the news broke that he was about to be ousted. The notion that he hadn’t a clue seems a bit farfetched given that he was gagged last week and replaced by Lane at two outside meetings where he was expected to discuss HP’s strategic direction, but the men did same to have a tin ear.

Tom Hogan, the executive vice-president of HP’s $57 billion enterprise business sales and marketing, presumably one of the key guys HP’s new CEO Léo Apotheker was hoping would stick around, quit Monday to “pursue other interests.”

He’s the first member of HP’s top echelon to bolt since the new administration took over in November.

Léo’s answer to this apparent dilemma was to name Jan Zadak, a Swiss who’s been managing director of HP EMEA, to replace Hogan effective May 1. Hogan’s last day will be May 31 “to ensure a smooth transition” but that doesn’t mean he’s showing up at the office.

Zadak may have something of a steep learning curve since his heritage is Compaq PCs and he doesn’t know the American market, where HP does more direct business than it does in EMEA. EMEA taps more of the channel for the cheaper selling cost.

Gossip says that Hogan, an ex-IBMer, was frustrated with Apotheker’s inability to understand that HP is primarily a people-intensive hardware company with a supply chain, not a software company.

Hogan was supposed to be “transforming” HP’s enterprise sales to make it easier to do business with a company that has a bunch of units pitching accounts.

Reportedly he doesn’t have another job, but it shouldn’t take that long.

Hogan joined HP in 2006 after Mark Hurd got there and according to the company “drove a significant extension of the company’s software portfolio, tripling revenues and expanding operating results.” Between IBM and HP, Hogan was CEO of Vignette.

Hewlett-Packard’s gonna do what it always swore it wasn’t gonna do and that’s wield its own multi-tenant and hybrid private clouds up against IBM, Amazon and Rackspace, but mostly IBM, expecting to attract the dev and test crowd at the top 2,000 global accounts first.

It says it will deliver “private cloud as a service” from its state-of-the-art data centers.

The company expects to start in North America and EMEA in February and expand to Asia-Pacific and Japan mid-year, according to Sandeep Johri, president, corporate accounts & industries. Apparently it’s already been practicing with France Telecom and some of its non-French customers.

It’s got what it calls, in its flat, inimitably pedestrian way, HP Enterprise Cloud Services-Compute, a hybrid private cloud that bundles SLA-based pay-as-you-go server, storage, network and security resources for running core applications and processes. It promises enterprise- and government-grade security, availability and ease of integration.

CloudSystem, based on HP’s popular blade servers and its notion of a “Converged Infrastructure,” uses HP’s cloud automation and management software for delivering unified security, governance and compliance across applications, as well as physical and virtual infrastructure.

It’s advertised as “the most complete, integrated system to build, manage and consume services across private, public and hybrid cloud environments.”

CloudSystem is supposed to enable new cloud services to be up and running in minutes and supports HP Cloud Maps, which provide preconfigured catalog objects to automatically provision optimized application and infrastructure resources. It’s got Maps for Citrix, Microsoft, Oracle, Red Hat, SAP, SAS, Symantec, Tibco and VMware.

HP sees the cloud as part of its two-month-old notion of “Instant-On Enterprises,” where everything and everyone is connected and users can quickly adjust to changing demand.

It figures the cloud is going mainstream and claims to have “the enterprise experience, breadth of portfolio and global service delivery organization to lead our clients through this transformation.”

Naturally it will sell services into the endeavor and offer financing for clients building private cloud deployments who want to minimize capital expenditures.

HP never got back to us about the rumor that initially it would have only storage.