HP in talks to buy EDS
Hurd's big bite
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Hewlett-Packard's Mark Hurd may be remounting his company's services charge, according to The Wall Street Journal, which says he is close to signing a deal to acquire Electronic Data Systems for $12bn to $13bn.
That would represent as much as a 38 per cent premium over EDS's current market capitalization, at least based on Friday's closing price, and a sign that HP is serious about getting the acquisition completed.
HP confirmed it is in talks with EDS, but said little else. "There can be no assurances that an agreement will be reached or that a transaction will be consummated," a company statement read. "HP does not intend to comment further until an agreement is reached or discussions are terminated."
With HP well into its golden years, the company continues to look for ways to keep revenue growing. It tried to acquire PriceWaterhouse's consulting division in a bid that famously flamed out in 2000 - IBM ended up buying the group two years later. Since then, HP has taken only baby steps in that direction after the company ran into trouble digesting Compaq, and Hurd was brought in to rejigger strategy and the company.
In 2006, HP acquired Mercury Interactive for $4.5bn, and over the weekend, it emerged that the company is poisted to pay £1.5bn to take over datacenters from BT. Last year, HP generated $16.6bn in sales from services, about 16 per cent of its overall $104bn revenue.
The deal would be HP's biggest since buying Compaq for $20bn in 2002. It could be announced as soon as Tuesday, according to unnamed people the WSJ said were familiar with the matter. EDS shares were 28 percent following the report. ®
COMMENTS
Because..
For a start you got a bonus...
One up on the EDS Monkey's I can tell you.
F.. Me
I was absorbed into hp, how anybody here can think they would be better off of with hp is laughable, I have not a had a real training course in over three years, my annual bonus last year was 0.5% due to Turds changes, All I can hope out of all this is redunancy.... and soon
May be for the best
I also worked for EDS until 2006. That company needs a big shake up for the benefit of it's beaten employees as much as for it's clients.
Advice to HP:
a) EDS is massively top heavy administratively. Clear out the middle management and enpower PM's to run thier own budgets
b) Sack the sales teams. There is no skill in underbidding and that's all EDS sales know how to do. So you might as well get rid of them.
c) EDS as a company is paralysed with an obsession with financial control bordering on a disorder. You cannot micro-manage the finance of a company that size from the top.
d) Redundancies needs to happen it the USA, instead of strangling the profit making EMEA operation simply to maintain the edifice in Plano.
I could write so much more, but it would run to pages & pages. The company needs a good shakeup. Question is whether HP have the skill and reach to achieve it.

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