EDS and HP ... interesting!
Both HP and EDS have acknowledged that talks are progressing between the companies. The potential is there for HP to add significant services capability to its already potent hardware business, to create a full service technology company to challenge IBM. IBM has lots of competition in many of its verticals, but I personally think that, other than a deal like this, the major threats to IBM as a full service company would come from companies like Wipro and Infosys in India.
When HP bought Compaq I wondered if that was a good move ... it has helped them to become the number one in the PC world! Carly Fiorina's star lost some lustre over that deal and it probably was a big part in her moving on from HP, but she was the kind of driver that made it happen and that deal has given HP the size to be able to pull off an EDS acquisition.
Employees at both companies will be worrying about their future, but I would suggest the future is very bright for anyone with good skills. Both companies run lean shops, with everyone working hard today and that is unlikely to change. There may be a little rationalization in non-core functions, but I think it will be minimal and in a time when skills shortage are becoming more and more topical, good people will always have a job.
Supplier to these companies will be watching carefully, some no doubt wondering where they will stand when, (and if), the dust settles. Eagle is a supplier to EDS but not to HP, so my feeling is very positive. HP are very likely to let the services gurus (EDS) run the services business, and the hardware gurus (HP) run that side of the shop. There will be lots of crossover and matrix management but that is how it will likely play out. For a company like Eagle that means opportunity as we get the chance to staff up what were pure HP projects, that will likely become EDS led projects.
You can always rely on change happening and there really is no point in worrying about it. Worry about the things you can control, plan for the things you can plan for and let everything else go! I will be watching this deal closely!
Labels: Business, Canadian Technology Landscape, Management
posted by Kevin Dee at 11:36 AM
7 Comments:
As an EDS employee I tend to agree totally at this stage with Kevin Dee's comments and time will tell.
8:42 PM
I think this is a questionable deal from HP's perspective. Other than following in IBM's footprint, I don't know why they want to be a vendor that has hardware, software and services, particularly generalized IT outsourcing services such as those supported by EDS.
I believe HP has shown double digit growth in the past 2 years, while EDS has been in the low single digits. Again, I don't see how this move puts HP in a better position, as I did with the HP acquisition of Compaq.
9:32 AM
it was and continuous to be interesting news for us folks in the services business in HP. Time will tell how this works out. It will be an interesting next few months... :)
2:58 PM
Wherever EDS has a better control, they should be leading the role. They seem to do better in services.
5:33 AM
This is two world class organizations, with complementary offerings, coming together. How bad can that be?
If I am an HP person in services or an EDS person I have to feel good that things are just going to be that much better. More stability coupled with access to EVEN more talent. Nice!
Change is the only constant ... embrace it, and you will be just fine!
5:34 PM
I don't know who it is that can look at HP or EDS and claim "lean" operations. As an employee of HP (via acquisition), and having interfaced with EDS extensively over the last year (with EDS being our largest customer before HP bought us out), I can testify that neither company are lean.
EDS is the slowest-operating of all of our customers - down to needing to get work orders and technician time to rack a server because the admins aren't allowed.
As an inside observer, I can only say this is going to end badly for both sides - especially the employees brought over in the acquisition. HP likes to bally-hoo a >98% employee retention rate during the transition. What they don't publicize is that they have about a 50% attrition rate after one year from employees who realize they got screwed-over by agreeing to the move. Those numbers have held through the Mercury acquisition, and the company I was a part of when we were bought has already started to see losses.
10:01 PM
As a former IBMer, I think this is a necessary move for HP to deversify out of a high reliance on hardware and it's related lower profit margins.
I also agree with EC that neither company from my perspective is running "lean", but good, experienced IT talent will get harder to find so while there may be people worried if they are laid off will land ok.
1:11 PM
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