There is an optimal size for every company. When it strives to expand and become all things to all people it cannot focus on achieving any of these things well. Divide the company into smaller more agile going concerns. Allow the parent company to use the services of the new company, OR any other company that is competitive. This drives down costs. Allow the new company to sell its services to other companies too. This makes them more profitable.
*original idea perloined from Maverick*