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Short Takes: HP takes another shot at services market


By SD Times News Team
June 1, 2008 —  (Page 1 of 3)
HP buys EDS, aka, "HP Global Services"

Big Blue's biggest weapon has long been its services arm. As the saying goes, when you buy enterprise "solutions" from IBM, the bulk of the sale is the van full of services folks with packed suitcases, ready to move into your office for good. It’s a simple, yet Faustian, bargain: You give them all your money, and they take care of everything. Forever.

IBM Global Services differentiates IBM from, say, Microsoft, which sells its software through the channel, leaving the lucrative services business for partners. In a few cases, as with its Avenade joint venture with Accenture, Microsoft does capture some services revenue, but otherwise, Microsoft doesn't play in that world.

Hewlett-Packard is another Big Blue competitor that just doesn't measure up when it comes to services and service revenue. Eight years ago, HP almost bought PricewaterhouseCoopers, but pulled back from the deal. Instead, IBM snapped up PwC a couple of years later, for a lot less dough.

Now, apparently, HP is ready to try again by purchasing Electronic Data Systems for almost US$14 billion. The day before the sale was announced, EDS’ shares soared 28% on the news, while HP’s fell by 5%. The next day, HP lost another 5% and change, which is hardly a vote of confidence.

To me, this doesn't seem like a good deal. But then again, I'm skeptical about HP's ability to take full advantage of its large acquisitions. HP never achieved the value it could have from the Compaq fiasco, and the jury is still out as to whether HP and Mercury Interactive are better off as a single company. Certainly, Mercury's competitors remain delighted about the acquisition—and the amount of business they picked up because of it.

Alan Zeichick


Please don’t send unprintable PDFs

Pointless annoyances are unwelcome. Take notes, Adobe Systems. While the nice folks at Adobe’s PR operation are responsive, and well, nice… they have the bad habit of sending me press releases in PDF format with rights management enabled.

 Related Search Term(s): Adobe, Apple, HP

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