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Technology Deals HP challenges IBM for service supremacy with $13.9 billion EDS buyout
Technology Deals HP challenges IBM for service supremacy with $13.9 billion EDS buyout | HP challenges IBM for service supremacy with $13.9 billion EDS buyout |
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| by Stan Beer | |
| Wednesday, 14 May 2008 | |
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Page 1 of 2 According to technology research analysts from Ovum, Phil Codling, John Madden, and Tom Kucharvy, the EDS acquisition is a market shaker. Prior to confirmation of the HP and EDS merger, the OVum analysts had this to say: “It’s become axiomatic to say that the IT services market is consolidating. In actual fact, in contrast to the software sphere, there have been very few large deals in recent years, with most of the merger activity confined to small and mid-sized moves (Logica buying Unilog, CSC buying Covansys, and so on). The top ten or so of the IT services industry have barely changed places, let alone ownership, despite interminable rumours and private equity interest. But here comes a possible very big play indeed – big not just for HP and EDS, but also in terms of its potential to shake up the entrenched competitive landscape in global IT services. “In terms of capabilities, EDS would bring depth and experience to HP’s IT outsourcing organisation. Although HP has proved it can handle large-scale global outsourcing contracts (such as P&G), it has nowhere near the reach and customer base of EDS in some sectors and markets, particularly government contracts. Such a combination could open up new avenues for HP to peddle its stable of software and systems management products, as well as hardware (although realistically many of EDS’s clients already use HP gear).” However, the Ovum analysts sounded a word of caution, noting that large acquisitions always posed risks in the area of integrating two corporate cultures. |
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