That was quick. Just this morning HP admitted it was in “talks” to acquire EDS and a few hours later it’s official.
HP will acquire EDS for $13.9B and brand it, “EDS – an HP Company” (creativity evidently didn’t get in the way of announcing the deal). The new business unit will maintain its EDS centricity… with HQ in Plano, TX and led by EDS Chairman, President, and CEO Ron Rittenmeyer.
On paper, this will double HP’s services revenue to approximately $38B.¬† The question in my mind is exactly how does this align with HP’s strategic plan at this point?¬† In some respects, it would seem to well support a cloud computing vision.¬† Many would also say this is clearly aimed at IBM, but one has to wonder if there will be cultural challenges that will slow HP’s ability to leverage EDS toward that goal.
Toward that end, and having worked with both companies extensively in the past, I’ve always admired HP’s culture of innovation.¬† Most people would not use the innovation term when describing EDS, but I’ve personally found their services organization to be accommodating and open minded.¬† Maybe it could work.¬† Let’s hope so because we need another strong competitor on the scale that this deal suggests.