HP has now officially joined hands with EDS in holy matrimony. The previous marriage went on a roller-coaster initially; the priest who solemnized it was fired; the family was dead against it. And yet, years later, HP has made the marriage work and has now proceeded for the next. Acquiring Compaq was probably one of the good decisions that HP took at that time, though unfortunate for Carly Fiorina, the "good decision" verdict came a little too late.
With EDS, HP hopes to repeat the story and take on a mammoth IBM. But is EDS a right choice at the moment? I have my own doubts. Questions to ponder:
(1) Does HP really need to get into Services and compete with IBM?
(2) Is EDS a worth choice?
(3) Is the price worth it?
With no proper strategy of its own, EDS has been laying its hands wherever it could to survive thus far. The synergies as explained by HP's executive management are vague and it might well take a long time before anything becomes realistic. My take is that HP has made a well calculated move to expand their services portfolio by mergers/acquisitions, but the EDS purchase is not all that brilliant. I may be proved wrong, but until then I would stand by what I say. One thing is sure though - what good will come to HP after this merger is debatable, but it will sure wake the sleeping giant IBM and make the elephant dance - or shake. IBM is bound to make stern changes to its organizational structures, hiring & firing policies and focus more on customer delight.
Mark Hurd is supposed to be extremely thoughtful and smart, as opposed to blunt Ms. Fiorina and one can only hope that he and his team will put in considerable energies to make sure that they get the necessary synergies. Meanwhile, the BFL investors can laugh all the way to the Bank - their sale to MPhasis and then to EDS and now to HP has definitely made them richer.
With EDS, HP hopes to repeat the story and take on a mammoth IBM. But is EDS a right choice at the moment? I have my own doubts. Questions to ponder:
(1) Does HP really need to get into Services and compete with IBM?
(2) Is EDS a worth choice?
(3) Is the price worth it?
With no proper strategy of its own, EDS has been laying its hands wherever it could to survive thus far. The synergies as explained by HP's executive management are vague and it might well take a long time before anything becomes realistic. My take is that HP has made a well calculated move to expand their services portfolio by mergers/acquisitions, but the EDS purchase is not all that brilliant. I may be proved wrong, but until then I would stand by what I say. One thing is sure though - what good will come to HP after this merger is debatable, but it will sure wake the sleeping giant IBM and make the elephant dance - or shake. IBM is bound to make stern changes to its organizational structures, hiring & firing policies and focus more on customer delight.
Mark Hurd is supposed to be extremely thoughtful and smart, as opposed to blunt Ms. Fiorina and one can only hope that he and his team will put in considerable energies to make sure that they get the necessary synergies. Meanwhile, the BFL investors can laugh all the way to the Bank - their sale to MPhasis and then to EDS and now to HP has definitely made them richer.
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3 comments:
This may be a big merger and we have to wait and see how it succeedss
Though EDS is second to IBM on Services they are not globally diversified like what IBM has done and especially in INDIA they increased their numbers by merging with Mphasis to show their strength
HP may be a good competitor to IBM on the hardware side but on Services they are far behind.
So next one to two years will tell us how success this merger was and IBM would have woke up and would have did some thing to counterfit this
Did they have any other company to take over !!??
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