05-13-2008, 05:13 PM
Hmmm. I think HP needed to do something like this, although it was doing very well without a larger services business. HP generated about $17 billion in revenue last year from services. This represents about 16% of HP's total revenue. HP has about 172,000 employees and the company as a whole generated over $100 billion in revenue last year, yet EDS's approximately 139,000 employees only generated $22 billion. Yes, yes, I know I'm leaving out margin, but I can't see how higher margin % on the $22 billion is better than the volume of margin $ on $100+ billion. HP is obviously going to use EDS as a vehicle to get more high profile customers for its other business, like EDS's Navy Marine Corp Intranet deal, which currently uses Dell desktops, servers, and (rolling eyes) storage.
I was at Dell when they were awarded this contract along with EDS, this was also about the time that HP and Compaq merged, which at the time I agreed with the description of the merger as two dinosaurs fraking. In the end, that merger has turned out well, but didn't bear any real fruit until Mark Hurd took over. Hopefully, HP can move a little quicker this time. It should bump HP into the Fortune 10; they're currently 14.
I was at Dell when they were awarded this contract along with EDS, this was also about the time that HP and Compaq merged, which at the time I agreed with the description of the merger as two dinosaurs fraking. In the end, that merger has turned out well, but didn't bear any real fruit until Mark Hurd took over. Hopefully, HP can move a little quicker this time. It should bump HP into the Fortune 10; they're currently 14.