News

posted on 13 May 2008 15:01

HP is buying EDS for $13.9 billion in an all cash deal that will more than double HP's service revenues to upwards of $38 billion a year. Many EDS shareholders will receive million dollar plus payments.

The new services business, to be called EDS - an HP company - will employ 210,000 people in more than 80 countries and be headquartered at EDS' existing Plano, Texas HQ. It will be run by Ron Rittenmeyer, currently EDS chairman, president and CEO, who will join HP's executive council and report to HP chairman and CEO Mark Hurd.

He has achieved what ex-HP CEO Carly Fiorina tried and failed to do, which is to acquire a globally significant IT services business. His performance at HP is clearly stellar and he has become one of the top CEOs in the world-wide IT business.

The release stated that 'specific service offerings delivered by the combined companies are: IT outsourcing, including data center services, workplace services, networking services and managed security; business process outsourcing, including health claims, financial processing, CRM and HR outsourcing; applications, including development, modernization and management; consulting and integration; and technology services. The combination will provide extensive experience in offering solutions to customers in the areas of government, healthcare, manufacturing, financial services, energy, transportation, communications, and consumer industries and retail.'

HP is likely to focus more on infrastructure outsourcing and leverage its own internal datacenter consolidation skills to wring a whole lot more profit from the EDS IT infrastructure. It will also, in the writer's opinion, steadily move into cloud-type services, offering computing and storage resources over the 'net to customers.

Welcome to massive new competition for IBM Global services.

^{[B&F staff.]}