The Eagle Blog

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!


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24 thoughts on “EDS and HP … interesting!

  1. As an EDS employee I tend to agree totally at this stage with Kevin Dee’s comments and time will tell.

  2. As an EDS employee I tend to agree totally at this stage with Kevin Dee’s comments and time will tell.

  3. 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.

  4. 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.

  5. 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… 🙂

  6. 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… 🙂

  7. Wherever EDS has a better control, they should be leading the role. They seem to do better in services.

  8. Wherever EDS has a better control, they should be leading the role. They seem to do better in services.

  9. 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!

  10. 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!

  11. 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.

  12. 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.

  13. 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.

  14. 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.

  15. Probably a good move for the senior staff who hold stock etc. Going to be tough for the workers. EDS management has a terrible reputation for bullying and being only focused themselves. If HP get rid of them (and I suspect that this is what they want, with a parachute)and keep the workers, who are a pretty committed team, then things will work out.

  16. Probably a good move for the senior staff who hold stock etc. Going to be tough for the workers. EDS management has a terrible reputation for bullying and being only focused themselves. If HP get rid of them (and I suspect that this is what they want, with a parachute)and keep the workers, who are a pretty committed team, then things will work out.

  17. I think the comment about EDS management is very anecdotal. I have met senior management from all of the large integrators and the EDS management stack up well. There will always be situations where there are “bad” managers in any large company, there are also tough times when business decisions can seem harsh to the staff, but all in all I would suggest that this is a merger of two good companies … with good people in both.

  18. I think the comment about EDS management is very anecdotal. I have met senior management from all of the large integrators and the EDS management stack up well. There will always be situations where there are “bad” managers in any large company, there are also tough times when business decisions can seem harsh to the staff, but all in all I would suggest that this is a merger of two good companies … with good people in both.

  19. Only EDS Management would deny that they are bullies. Only EDS Management would argue that they really care about employees, their future, customers etc. beyond immediate profit. The I T Industry has many ex EDS employees that would not do business with EDS and would run a mile at the thought of being outsourced to EDS. My advice to HP, get rid of the EDS management asap if you want a future.

  20. Only EDS Management would deny that they are bullies. Only EDS Management would argue that they really care about employees, their future, customers etc. beyond immediate profit. The I T Industry has many ex EDS employees that would not do business with EDS and would run a mile at the thought of being outsourced to EDS. My advice to HP, get rid of the EDS management asap if you want a future.

  21. It is amazing the number of blog sites with complaints about EDS. Absence of raises, absence of decent, honest Management, focus entirely on financials, poor customer relationships, poor morale and it goes on and on. Are all Outsourcing companies this bad? EDS certainly seems a poor role model. Unfortuneatly, HP sounds the same. This cant be attractive to customers or potential staff.

  22. It is amazing the number of blog sites with complaints about EDS. Absence of raises, absence of decent, honest Management, focus entirely on financials, poor customer relationships, poor morale and it goes on and on. Are all Outsourcing companies this bad? EDS certainly seems a poor role model. Unfortuneatly, HP sounds the same. This cant be attractive to customers or potential staff.

  23. The short answer … EDS and HP are good companies and outsourcing companies can be great employers giving decent income and a challenging work environment.

    All outsourcing companies operate in a hyper-competitive world and that can generate some of the behaviours that “some” employees see. The same can be said for ALL employers.

    I have worked FOR two system integrators directly and WITH most of those operating in North America. Generally they are ethical companies who rely on being able to attract great people in order to be able to do what they do … you can’t attract great people if you are not a good employer.

    There will ALWAYS be people who have negative things to say about former employers and they tend to be louder than those who have good things to say. Who knows what their motivation is? Their bad experience does not mean others will have a bad experience.

    I like to make my judgements based on my own experiences or those of people I know and trust.

  24. The short answer … EDS and HP are good companies and outsourcing companies can be great employers giving decent income and a challenging work environment.

    All outsourcing companies operate in a hyper-competitive world and that can generate some of the behaviours that “some” employees see. The same can be said for ALL employers.

    I have worked FOR two system integrators directly and WITH most of those operating in North America. Generally they are ethical companies who rely on being able to attract great people in order to be able to do what they do … you can’t attract great people if you are not a good employer.

    There will ALWAYS be people who have negative things to say about former employers and they tend to be louder than those who have good things to say. Who knows what their motivation is? Their bad experience does not mean others will have a bad experience.

    I like to make my judgements based on my own experiences or those of people I know and trust.

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