Annex Bulletin 2008-12 May 12, 2008
A partially OPEN CLIENT edition
Recent... 
IBM "Places" By a Nose over Google - Analysis of Top 20 IT Cos stock and business performances
Big Blue Takes Chill Off Wall Street's Spring (Analysis of IBM's first quarter business results)
INDUSTRY TRENDS
Updated 5/12/08, 9:00PM PDT
Four Years Ago We Asked HP CEO Why Not Buy EDS? Now Its New CEO Is Reportedly Contemplating Just That
Better Late Than Never
HP's Takeover of EDS Would Be a Win-Win Deal for Both
BELGRADE, Serbia, May 12 – I am
currently traveling from Belgrade to Rome, so this will have to be of
necessity a brief comment about a breaking news of HP's rumored takeover of
EDS. Here are some off the cuff thoughts about it:
As you can see from the above "Tripolar World of IT
Services" chart, I have been talking about consolidations like that since
2004 (the chart was actually done for some client workshops in 2005). In
fact, in June 2004 at the HP meeting in San Jose, I asked the then HP CEO
Carly Fiorina why she would not want to buy EDS, given the complementary
nature of their businesses (see "Delivering
Value Horizontally," June 2004).
At the time, she said HP wasn't interested. I thought that was shortsighted.
And here's why:
"...everything has its price… including the cans of worms. They can be de-wormed or written-off for the right price. So a contrarian argument is that acquiring a traditional outsourcer like EDS would give HP a global delivery channel, and legitimize its claim that it is an alternative to IBM, which has been HP's stated goal." (an excerpt from the above Annex Bulletin, June 2004).
Well, if HP wasn't interested, we thought Fujitsu
should be, for similar reasons (see our Annex Bulletins from Jan 2005). And
then when rumors of a possible HP acquisition of CSC surfaced in 2005, we
did that Tripolar World chart.
Now we just need to move out of the HP sphere and move in EDS instead, as it
should have been in the first place.
Thought the stock market's initial reaction was interesting - EDS sharply
up, HP down. Actually, both should be up, as far as I am concerned. EDS will
finally get strong managements, and HP will get the reach and range in the
services area that it has been lacking. It will be a win-win for both
companies.
Happy bargain hunting!
Bob Djurdjevic
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Volume XXIII, Annex
Bulletin 2008-12 Bob Djurdjevic, Editor 8183 E Mountain Spring Rd, Scottsdale, Arizona 85255 (c) Copyright
2008 by Annex Research, Inc. All rights reserved. |
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