EDS to be integrated into HP’s Technology Solutions Group

by Editor 12/8/2008 1:12:00 PM
Information technology giant Hewlett-Packard revealed plans on Friday to further integrate IT consulting firm EDS into its operations arm in order to boost its products and services offerings.

EDS will now be integrated into HP’s Technology Solutions Group, which offers services related to software, hardware, support and consulting.

“We are ahread of schedule with the integration of EDS and combining TSG and EDS is the next step in that process,” said HP chairman and CEO Mark Hurd.

When HP announced the acquisition of EDS in May 2008, it said ti would fold its outsourcing business into a new, Texas-based unit, “EDS – an HP company.” Once the acquisition was complete in late August, HP moved its outsourcing and application services business to EDS.

In mid-September, HP revealed plans to integrate EDS into its own operations and implement a three-year restructuring plan that would involve cutting 24,600 jobs.

EDS, now part of the Technology Solutions Group, will still be based in Plano, Texas and keep offering IT services, application services and business process outsourcing. Ron Rittenmeyer, EDS president and CEO, will retire by the end of the year and be replaced by EDS senior vice president Joe Eazor, who previously served as the executive vice president of corporate strategy and business development at EDS. Eazor will report directly to TSG executive vice president Ann Livermore.

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Hewlett-Packard completes acquisition of Electronic Data Systems

by Editor 8/27/2008 2:28:00 PM
Electronic Data Systems (EDS) now officially belongs to hardware giant Hewlett-Packard. HP made the announcement on Tuesday, saying that its $13.9 billion acquisition of the Texas-based IT services provider is complete.

The deal will allow HP to expand its business operations in the field of technology consulting and outsourcing services.

What HP did not clarify in the statement, however, were the company's plans for automation and the fate of the 140,000 EDS employees.

Mark Hurd, Hewlett-Packard CEO, has said in regard to EDS that he will improve efficiency and cut costs in the company, but neither he nor EDS chief executive Ron Rittenmeyer will provide any details of the plans until they have held a presentation for Wall Street analysts on September 15.

Hurd has a good track record with improving efficiency and profit margins, reducing costs, and integrating established IT firms into the existing structures of HP. The HP CEO was successful at completing the integration of Compaq and has overseen acquisitions of 26 other firms since he became HP’s chief executive in 2005.

Last week, Hurd said that more than 500 HP and EDS employeers were working full time on the merger of the two companies. He had previously confirmed that EDS chief executive Ron Rittenmeyer would stay at the helm of EDS as a division of HP, and report directly to him.

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Electronic Data Systems (EDS) acquisition approved by the European Commission

by Editor 7/28/2008 4:08:00 PM
IT consultant,ITjobs,computer jobs
Hewlett-Packard announced on Friday that its plans to buy Electronic Data Systems Corp. (EDS) for $13.9 billion have been approved by the European Commission, which serves as the antitrust regulator of the European Union. The EC has not imposed any conditions on the world's leading computer company before approving the acquisition. 

EDS and HP said that the merger would not happen before August 18. EDS has also confirmed that it will pay its Q3 dividend ($0.05 per share) on September 10.

Hewlett-Packard, a company that has about 2.5 billion shares of common stock outstanding, has declared a regular cash dividend (0.08 per share), payable on October 1.

HP's acquisition of EDS was originally agreed upon in May 2008. With EDS under its wing, HP will be able to better compete with IBM on the market of technology consulting, customer support and other services. It has already usurped IBM as the world's leading technology company in terms of revenue.

The deal has yet to be approved by EDS shareholders, who will have a vote on July 31, and to obtain regulatory clearance from other non-U.S. jurisdictions.

If the acquisition is successful, HP is likely to win more government contracts in the future, since EDS is one of the leading government contractors in the technology sector. The deal will also probably more than double HP's services revenue and be the company's biggest acquisition since Compaq in 2002.

Find the latest job opportunities at EDS and IBM on our IT consulting job board

 

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HP agrees to buy EDS for $13.9 billion

by Editor 5/13/2008 3:29:00 PM

World's biggest PC maker Hewlett-Packard was reported to be in advanced talks to acquire IT services provider Electronic Data Systems (EDS) yesterday and news about the acquisition, as the Wall Street Journal predicted, arrived as early as today: HP has agreed to buy EDS for $13.9 billion. 

HP chief executive Mark Hurd said:

"The combination of HP and EDS will create a leading force in global IT services. Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry."

The acquisition will be a tremendous boost to HP's IT consulting arm and more than double its size to produce a new business that will be better equipped to take on International Business Machines Corp. (IBM) as a rival on the IT services market.

Hewlett-Packard has tried for years to challenge IBM in the lucrative field of IT services by improving its technology consulting and data management arms.

In 2000, HP's attempt to buy the PricewaterhouseCoopers' consulting division failed and the PwC consulting business ended up in IBM's hands instead.

“While Hewlett-Packard has over time built up its own outsourcing practice, this clearly is a move by Mark Hurd to challenge IBM in the services area,” said David Garrity, director of research at Dinosaur Securities.

The information technology services market is particularly interesting to HP because experts predict that it will grow more than eight percent annually over the next five years. At the same time, Wall Street analysts predict that HP will grow about five percent.

EDS reported revenue of $22.1 billion last year. The company's main rivals are Accenture and Computer Sciences Corp. (CSC) on the U.S. market and Indian tech giants Tata Consultancy Services (TCS) and Infosys Technologies Ltd. internationally.

In 2007, IBM held 7.2 percent of the share of the technology services market. EDS followed with three percent and HP had 2.3 percent and was fifth overall, according to a Gartner report.

In the last three years, HP has mostly seen its business flourish. Since Mark Hurd came onboard as the new chief executive, the company has overtaken IBM as the largest global technology company and Dell as the world's number one seller of personal computers.

The acquisition of EDS will also help HP yield more government contracts: EDS' government projects are worth about $2.5 billion. The company is among the top 10 government technology contractors in the U.S. and the number one government contractor in the UK.

This will be HP's biggest acquisition since 2002, when the tech giant bought Compaq Computer Corp. for $19 billion.

In the wake of the acquisition talks, EDS shares rose almost 28 percent, while HP's dropped more than five percent, reflecting investors' concerns over the deal.

Commenting on yesterday's reports, an IBM representative said: “Integrating services companies is difficult. And to be competitive today, you have to be globally integrated.”

Echoing the thought, AMR Research analyst Dana Stiffler warned: “Palo Alto versus Plano wrangling will destroy any short-medium term benefit unless there’s a strong integration roadmap.” 

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