We use cookies and other similar technologies (Cookies) to enhance your experience and to provide you with relevant content and ads. By using our website, you are agreeing to the use of Cookies. You can change your settings at any time. Cookie Policy.

Only leaked on Monday, HP confirmed yesterday that it would acquire EDS for north of $12 billion. The obvious driver, as colleague Dana Gardner noted, is that with the IBM and its global services colossus and the growth of outsourced, cloud, or on demand computing, that enterprise customers were going to demand a viable alternative Ė an Avis to IBMís Hertz so to speak.

Of course the deal brings back memories of when Mark Hurdís predecessor left off, which was the attempted purchase of PwC consulting for $18 billion back in 2000. Barely a couple years later, IBM swooped up PwC up for roughly a fifth of the cost. Besides the ridiculous price tag (these were pre-inflated dollars) was the question of culture clash. HPís techie culture seemed a poor fit for PwCís suit-and-tie atmosphere; as we maintained, IBM and PwC were a much better fit.



And while $12 billion still sounds like a lot of money, thatís probably about half of what HP would have paid back in 2000 with pre-deflated dollars.

But what a difference a few years and a more-focused senior management team make. Not only has Hurd rationalized the Compaq acquisition, but for the first time his team actually cultivated HP Software as more than an oxymoron, and has bulked it up with some shrewd acquisitions. Admittedly, success at HP Software doesnít automatically portend similar results with EDS, which has been through the acquisition game before. More importantly, comparing Hurd to Fiorina, he exercises the far more hands-on management style that will be necessary to pulling such a transformative deal off.

Among the challenges are reorienting EDS away from IBM to promote HP infrastructure. Given that EDS is stronger in infrastructure outsourcing rather than mainstream systems integration, that might be a smoother shift, but it will require an internal migration of expertise. EDS is already part way down the transformation road, having been slimmed down by CEO Ronald Rittenmeyer (he stays on as business unit head), and before that, Michael Jordon (no, not the Air Jordans guy).

Significantly, HP will preserve EDSís identity and autonomy, handing over some of Ann Livermoreís services operations. With more engaged management, HP stands a better chance this time of making such an acquisition work.

About the Author

Tony Baer is a Senior Analyst at Ovum, covering application lifecycle, SOA, and IT Service Management. Tony is a well-published IT analyst with over 15 years background in enterprise systems and manufacturing. A frequent speaker at IT conferences, Baer focuses on strategic technology utilization for the enterprise. Baer studies implementation issues in distributed data management, application development, data warehousing, and leading enterprise application areas including ERP, supply chain planning, and customer relationship management. As co-author of several books covering J2EE and .NET technologies, Baer is an authority on emerging platforms. Previously chief analyst for Computerwire's Computer Finance, Baer is a leading authority on IT economics and cost of ownership issues.

More by Tony Baer

-1-

1  

Explore Our Topics

  • EDITOR'S BRIEFING
  • Virtual Conferences
  • Webinars
  • Roundtables

BPM in Action

March 10, 2011

The sixth annual BPM in Action 2011 Virtual Conference will explore cutting-edge market developments in BPM and describe how to leverage them for improved business operation and performance. More

View All Virtual Conferences

Smart Case Management: Why It's So Smart.

Date:Nov 05, 2009
Time:12:00 PM ET- (17:00 GMT)

REGISTER TODAY!

Date:Oct 29, 2009
Time:15:00 PM ET- (19:00 GMT)

REGISTER TODAY!
View All Roundtables
  • Research Library
  • Podcasts
  • News

Joe McKendrick: Part II of II: Designing Evolve-ability into SOA and IT Systems

In part two of Joe McKendrick's recent podcast with Miko Matsumura, chief strategist for Software AG, they talk about how SOA and IT systems need to change and grow and adapt with the organization around it.

Listen Now

Phil Wainewright: Helping Brands Engage with Social Media

Phil Wainewright interviews David Vap, VP of products at RightNow Technologies, and finds out how sharing best practices can help businesses understand how best to engage with online communities.

Listen Now

Peter Schooff: Making Every IT Dollar Result in a Desired Business Outcome: Scott Hebner of IBM Rati

Scott Hebner, Vice President of Marketing and Strategy for IBM Rational, discusses a topic on the top of every company's mind today: getting the most from IT investments.

Listen Now

Jessica Ann Mola: Where Will BI Fit In? Lyndsay Wise Explains

In BI, this tough economy and the increasing role of Web 2.0 and MDM are certainly topics on people's minds today. WiseAnalytics' Lyndsay Wise addresses each of them in this informative podcast.

Listen Now

Dennis Byron: Talking with...Deepak Singh of BPM Provider Adeptia

Deepak Singh, President and CTO of Adeptia, joins ebizQ's Dennis Byron in a podcast that gets its hand around the trend of industry-specific BPM.

Listen Now
More Podcasts
  • Most Popular
  • Quick Guide
  • Most Discussed

Quick Guide: What is BPM?

Learn More

Quick Guide: What is Event Processing?

Smart event processing can help your company run smarter and faster. This comprehensive guide helps you research the basics of complex event processing (CEP) and learn how to get started on the right foot with your CEP project using EDA, RFID, SOA, SCADA and other relevant technologies. Learn More

Quick Guide: What is Enterprise 2.0?

A lot of people are talking about Enterprise 2.0 as being the business application of Web 2.0 technology. However, there's still some debate on exactly what this technology entails, how it applies to today's business models, and which components bring true value. Some use the term Enterprise 2.0 exclusively to describe the use of social networking technologies in the enterprise, while others use it to describe a web economy platform, or the technological framework behind such a platform. Still others say that Enterprise 2.0 is all of these things. Learn More