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!