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HP Seals the Deal, Buys EDS For $14B
netbuzz writes "Following yesterday's spate of heated rumors, the announcement comes this morning that HP has completed a deal to buy EDS for just under $14 billion. The acquisition has been approved by the boards of both companies, according to HP. EDS CEO Ron Rittenmeyer has issued an e-mail to his employees promising that the company brand will continue and, "We are — and will remain — EDS."
As an HP employee I hope HP is smarter than GM was. Remember the GM bought EDS in the 80s and EDS milked GM for all it was worth. EDS did great; GM not so. Of course GM thought it was buying a company to outsource its IT to while HP is looking to merge outsourcing operations with EDS.
Looks like HP is moving into IBM/DELL territory ( managed IT services ). I'm not too worried for IBM.
DELL, on the other hand, has a real fight on its hands. So.. umm... Mike.. why don't you forget about your small business services crap and go back to focus on making good machines and providing good customer service.
I don't know if EDS was the best vehicle to use, but its better than trying to setup something new.
"We are -- and will remain -- EDS."
Until the day after the merger, the execs cache out, and the infighting between the remaining managers starts. Executives on the bottom end of the merger always do one of two things:
- Cash out
- Try to outmaneuver the execs on the top end of the merger and take over the whole company, with a lot of bitter intrigue in the process
You have to wonder how current EDS customers who are attached to their non HP hardware and software will feel about this when EDS suddenly has a massive bias to drive every nail with an HP hammer.
@de_machina
Someone can define HP's culture? Compaq's culture? Digital's culture? IBM's culture? And so on? It would be interesting to finally know if they are really so much different.
Achille Talon
Hop!
I don't know that I can define the above cultures very well, but corporations do have cultures, as do brands. When I worked for Harrahs, Inc. we never said gambling even though we owned casinos. We were about responsible entertainment. We also provided a clear formula to the customers for how much "gaming" meant how many reward points.
When we became Horseshoe, we were all about gambling, gambling and gambling. We couldn't say gambler enough. Our comping system because obtuse and complicated, and seemingly random. We actually comped less, but tried to create the image that anyone could be comped for anything. Employees were also treated better even though we basically had the same management staff all the way up to the GM of the casino, but brand and company cultures were different.
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
On the flip side for us Digital folks who had been under Compaq, HP was a return to much more what Digital was like than what Compaq was. It was kind of like putting up with 5 years of people saying "the culture won't change" while they tried to change it, to finally going back to a similar culture.
I think more than anything it has to deal with where the companies priorities are.
Compaq's priorities were obviously its PC business, so the Unix/Linux/VMS/etc etc folks felt like they were getting the corporate culture shaft. Then after the HP merger the culture became much more focused on services and enterprise business, so suddenly everyone at traditional Compaq felt their culture was being crushed because the focus was elsewhere.
If HP's focus really is on growing its services, then there is a decent chance that the culture might stay fairly in tact (they want them for how they are). If instead they simply plan on using EDS as a tool for driving other business goals, then there is a fair chance of being pulled into the same corporate culture.
As a final note as a DECPaq HPer. I much preferred HP's culture under Mark Hurd to the culture at Compaq. He's a cost cutter, but he's also made for a very efficient productive well focused company. More than Carly ever did for sure. Even HP's innovations seemed to have started coming back, with some of the recent announcements in nano computing, etc.