back to article HP pays $13.9bn for EDS

Hewlett Packard has bought EDS for $13.9bn, doubling its services business at a stroke. The Silicon Valley giant will pay $25 a share for Texas-based EDS, over 25 per cent more than the services firm's shares were trading at when news of the deal first leaked yesterday. It will finance the deal through a combination of cash …

COMMENTS

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  1. Paul R
    Thumb Down

    Great name

    I so look forward to answering the phone - 'Good morning, EDS - An HP Company, how may I help you'. :(

  2. Ted Treen
    Paris Hilton

    Gov't contracts?

    So now the NuLab's Gov't contracts will be screwed up by HP instead of EDS.

    Why are civil servants so stupid over commissioning IT contracts - and why is it anathema to them to actually ask the end users what they actually need & what they actually want?

    This is obviously a rhetorical question, as we all know Whitehall to be the last refuge of the terminally incompetent and the otherwise unemployable.

    Paris, 'cos she has the intellectual capacity of which most Whitehall occupants can only dream...

  3. Michael Ortmann
    Coat

    Nitpicking

    Just to do my geeky duty and be anally retentive: Silicon Valley (in the guise of HP) already was in Texas, courtesy of COPAQs (R.I.P.) old Houston Headquarters that they still keep around.

    Mines the one with the "Beckmessers guide to the Galaxy" in the pocket...

  4. Anonymous Coward
    Anonymous Coward

    hardware

    hope that doesnt mean we'r changing all our hardware to HP! :)

  5. Rodrigo
    Alert

    As an EDS employee, the only thing I have to say is...

    RUN FOR THE HILLS!!!

  6. Ken
    Heart

    KEN CALLING

    I love da EDS long time go EDS go u muthas. When will these HP hombots just leave the EDS alone.

    Smack me with a shovel cat face

  7. Jeff Silver

    @Rodrigo

    Writing as both an ex-HP and an ex-EDS employee, I have to say that Rodrigo has pretty much the right idea. On the other hand, since C.Fiorina converted that delightful Californian company into a Texan one (philosophy; not location), maybe you won't notice much difference.

    (No icon, 'cos there isn't one for "just mildly depressed".)

  8. Anonymous Coward
    Pirate

    "Doubling" ?

    Surely this was an inadvertent typo, your opener makes much more sense if written as

    >"Hewlett Packard has bought EDS for $13.9bn, dooming its services business at a stroke."

    There. Fixed it for ya.

  9. Alan Davies
    Coat

    I've sent Ron Rittenmeyer an email

    It said WOO! I'm still waiting for a rely.

  10. Anonymous Coward
    Alert

    HP Kit

    HP Printers - OK, HP Laptops - Good, HP PC's - Err........ Compaq - ????????

  11. Anonymous Coward
    Pirate

    I am EDS... (what a load of boll*x)..

    After spending thousands of dollars on a new advertising campaign entitled 'I am EDS...' only to sell itself to HP.. What a waste of money!!

    Proof that EDS managers cannot even run a pi** up in a brewery let alone a multi-national IT Outsourcing company!

  12. Anonymous Coward
    Anonymous Coward

    Itanium - Final Nail

    I guess cause Itanium sank they need to diversify, but EDS?

  13. TranceMist
    Alien

    The Matrix

    It'll be Neo and Agent Smith in real life.

  14. Ian S

    WTF!

    This about as mad as Time-Warner buying AOL

  15. Jeff Silver

    On spending money for a name

    Perhaps of some historical interest, regarding payments to PR agencies: I was at SD-Scicon when EDS bought it. The staff were gathered in a meeting to be told that some large sum of money had been paid to a PR agency to assess the competing merits of various possible names for the company. Said PR agency declared that the best mix of reputation and market presence (my apologies for the jargon) was "EDS-Scicon". And thus were we named.

    So far, so irrelevant. But almost exactly a year later, we had an almost identical meeting to tell us that the exact same exercise had this time produced the answer that we should be called...

    ...EDS.

    Beyond satire!

  16. Subby
    Go

    As another EDS employee...

    Will I get outsauced?

  17. TrishaD

    @Ted Treen

    Do you think HP could be persuaded to buy the Civil Service?

    Since they're now in the business of poo collecting.......

  18. Anonymous Coward
    Unhappy

    Darn! It's not April 1st...

    @Alan Davies: RR's probably still trying to figure how to open your mail - either that or his PA is on vacation. LOL

    @Rodrigo: I'm with you mate, like someone else said:

    Pre-deal you get a mail "Dear ex-employee. Your work has been transferred to a Brown Shore. Have a nice day. Signed, useless-USA-based-self-abuser@eds.com"

    Post-deal you get a mail "Dear ex-EDS-employee. Your work has been transferred to a Brown Shore/replaced-by-Wintel-cluster (delete as appropriate). Bye! Signed, useless-USA-based-self-abuser@hp.com"

    Plus ca change, plus c'est la meme chose... (apologies for the lack of accents, and the poor French).

  19. Ian Michael Gumby
    Thumb Up

    Overall makes sense...

    HP wants to compete with IBM.

    HP needs services arm.

    What's next? Sun and Accenture?

    Or maybe Sun might make a bold move and buy out Tata?

  20. Ishkandar

    @Michael Ortmann

    You forgot about Dell and THE original, THE ONE and ONLY Texas Instruments, makers of the best selling chip in the world !! The TI9900 is the most ubiquitous chip in the world; it's in everything from washing machines and fridges to the bloody annoying musical(???) doorbell !!

    As the prophesy stated - "In the last days, there shalt be WARS and rumours of WARS, and brother shalt turn against brother, and failing companies shalt purchase failed companies !! Thus spake the prophet as he puffeth on (still) Class-C herbs !!"

  21. Anonymous Coward
    Go

    Great news

    Does this mean El Reg can get back to spreading rumours and speculation about HP, like the great days of Fiorina and the Compaq buy?

  22. Herby

    One two initial company buys a three initial company

    And so it goes. Initials seem to be plentiful these days, and have no real meaning. It is just initials, and not much else.

    HP used to be called Hewlett Packard, but no longer!

    EDS used to be called Electronic Data Services (as I understand), but no longer.

    IBM used to be called International Business Machines, but no longer.

    DEC used to be called Digital Equipment Corporation, but is no longer.

    DRI used to be called Intergalactic Digital Research, but doesn't exist.

    Microsoft used to have decent software (you get the idea).

    Names come and go, employees come and go, companies get bigger and smaller, then come and go. Life goes on. Oh, well.

  23. Jay

    Yawn!

    So now EDS will have to buy crappy HP kit instead of the shitty Dell stuff they buy today.

  24. Anonymous Coward
    Coat

    EDS - an HP Company

    Yes - Houses of Parliament Sauce company.

    I have the 'pleasure' of working for EDS and I wouldnt touch it with a barge pole.

    EDS is big on talk but rarely delivers either to the customer or its employees. The management spin the truth more than the NuLabour UK Government, I think the phrase is 'economical with the truth'. Most of them couldnt run a welk stall. If EDS was well run it would be making a fortune from its apps business but it will never get there while the YES men and women are in charge. The numbers dont lie but the managers do - transformation is an illusion.

    HP has bought a company with many good clients but terrible management and a demoralised work force. As they say ''things can only get better' although I am expecting more of the same given HP seem to have the same 'cheapShore' business model.

    Otherwise they would have got rid of Ron RittenMeyer - he would sell his own mother if he thought he could get a cheaper one.

  25. Ed

    Match Made In Heaven

    EDS = Extremely Dumpy Service (Sorry EDS employees but your managment really sucks)

    HP = How Pathetic

    Looks like a good match to me.... :P

  26. Old Painless
    Gates Horns

    Home,home on the range...

    I don't want to insinuate that EDS are cowboys, but I've personally seen them go live for large govt dept , on the day some whitehall mandarin came to visit, with no trained staff , no PC build, and, in fact -no pcs or phones on the desk....well, you get the picture. Sharp exits all round - HP, what are you thinking you clowns? Michael Dell will be laughing his nuts off -and good luck to him!!!

  27. Anonymous Coward
    Alert

    Re Gov't contracts?

    "So now the NuLab's Gov't contracts will be screwed up by HP instead of EDS."

    EDS is the prime contractor for the US Navy/Marine Corps Intranet (NMCI), which has a few more years of life (contract to 2010, plus probable extensions). It was the bady executed early NMCI buildout that lead to EDS's $800m "financial curb kiss" for *one quarter* 4 years ago. That alone should have stuffed EDS but the contract was renegotiated to keep EDS in play since NMCI is too important politically to let die. Not to mention only M$ desktop software are allowed by the contract. (As well as the [ahem] "commodity" Dell hardware noted by a prior comment.) Does HP *truly* understand the game they bought in to?

    PS: HP's CEO is Mark Hurd? Of the GNU/Hurd family? Just curious is all. ^_^

  28. Matt Bryant Silver badge
    Happy

    RE: Ian Michael Gumby

    I don't think Sun have enough money left in the piggybank to buy Accenture after blowing it on StorageTek and MySQL. Sun was down to their last $4bn back in 2003, and haven't made a profit since, just bled more and more red ink (hopefully HP ink!). If they lose the big chunk of business that EDS used to bring them each year I expect Sun would have problems buying the whelk stall someone mentioned.

    I am a bit confused though - how does the Compaq merger rate as such a disaster? Pre-merger, HP was a $40bn turnover company and seemed stuck at that figure, and Compaq was less; post-merger HP has taken the best of both companies and grown to be the largest IT company with a turnover of over $100bn! After the StoregeTek fiasco, that sounds like the kind of disaster Sun would dream of, and even IBM look at enviously.

  29. fredfox
    Flame

    Fun fun !!!

    Rodrigo has got a fair point, but I'm quite looking forward to watching all the mid level "managers" running around worrying if their jobs are safe or not :) Be the most active they've been in years ! Also fun to watch them as they try to justify their existence.

    Maybe they'll get rid of all the over "engineered" processes that we're forced to use too, like that useless SharePoint system.

    How many re-orgs between now and the final hand-over I wonder ?

    Flames, because it's going to crash and burn !

  30. Anonymous Coward
    Linux

    Can we borrow a pen please HP

    EDS is managed for quarterly shareholder orientated results. The Plano management couldn't give a monkies about the morale of it's work force. Which is sad, because there are some very frustrated good employees who are overworked and underpaid. These are overbalanced by the complacent ones that are far too expensive to get shot of!

    So HP have spent all their money on buying EDS. They will then trim the EDS work force through redundancy payoffs. That leaves negative cash (by my maths) to try motivate and reinvigorate the employees that you need to turn the business around.

    And there are some good and successful projects worth keeping; which HP will probably break up and sell.

    I guess EDS folk will be waiting a while for morale to improve. But for now we ask, "can we have some pens please Mr Hurd? This stationary purchase freeze has be going for too long!".

  31. Anonymous Coward
    Linux

    Buying Success

    The new (and very expensive) EDS advertisement campaign majors on the company being "behind success". How far behind is the question.

    Couldn't HP have borrowed some extra $billion and bought success outright rather than second rate.

  32. DaddiesIsBetter
    Pirate

    What about the management

    As an EDS-er I'm hoping this will signal a cull of the myriad layers of unneccessary management that paralyse the company.

  33. joe
    Jobs Halo

    How much could it really hurt?

    IBM is laughing i know i am. Now i don't have to remember two names of companies that i hate and wouldn't deal with if the payed me.

    As for Sun, well, i don't think this is going to affect their install base much via EDS. UNIX admins and IT managers that know see a clear direction from Sun but HP-UX? Everyone knows that its a leaky boat caught in a squall (not insinuating theres anything wrong with the OS itself) but HP shoving 'Industry Standard' LOL Intel drek on the NIX world has not been a cake walk now has it?

    The only company that is truly grinning from ear to ear is IBM. You know the old saying "No one every gets fired for using global services" I've seen it happen using HP services and EDS ; funny isn't it?

  34. TMS9900
    Happy

    @Ishkandar

    Oh I'm with you on that brother, as my name indicates!

    Long live the Texas Instruments TMS9900!

    SWPB

    Mark.

  35. Anonymous Coward
    Paris Hilton

    Need another vowel

    Must be a good word made from the letters EDS & HP. The best I could get for HP AND EDS was HAD SPEND.

  36. Anonymous Coward
    Anonymous Coward

    This doesn't really change a lot...

    ...apart from the colour of the handle of the pitchfork used to shovel the 'resources' from one project to another.

  37. Tyrone Williams
    Stop

    Memories

    WOW

    Talk about deja vue, who would have thought that the cock raoches that declared the demise of HP back in 2001 would be brave enough to raise their heads again with similar rubbish?

    What a disaster the HP/Compaq merger was!

    Biggest IT company in the world

    No 1PCseller in the world

    Sales up

    Profits up

    Customer satisfaction Up

    As was said before, a disaster like that I can live with.

    And why would anyone hate a company?

    A company is an inanimate object, it is like saying "I hate the stop sign at the end of the road" just plain stupid. If you don't like the products don't buy them, quite simple realy.

  38. Anonymous Coward
    Anonymous Coward

    Anagrams

    The letters from "Hewlett Packard EDS" generate some splendid anagrams:

    Adept hackers dwelt, lewd perks attached

    Tackled head twerps:

    - Thwacked, plastered

    - Whacked, splattered

    Lacked twerp deaths

  39. Ishkandar

    Just for your delectation !!

    http://news.bbc.co.uk/1/hi/health/7403286.stm

    As an example of the kind of "wonderful deal" that HP has acquired, the NHS IT project is an open wound that will carry on haemorrhaging red ink for years to come since it is a *FIXED PRICE* contract !! Four more years to promised delivery date, then more years to next promised delivery date, then ......ad infinitum !! BUT NOT ONE CENT MORE WILL THEY RECEIVE since they have been paid and NOT delivered !!

    Ross Perot and the other shareholders MUST be bawling their collective eyes out all the way to their off-shore tax-haven Caribbean bank !!

    What's the betting that a now-relieved Ross Perot will be up to his old tricks and challenge Barack Obama for the Presidency ??

  40. Anonymous Coward
    Anonymous Coward

    Levels of management in EDS - LOL

    "DaddiesIsBetter

    Posted Tuesday 13th May 2008 22:24 GMT

    As an EDS-er I'm hoping this will signal a cull of the myriad layers of unneccessary management that paralyse the company."

    It seems to change on a monthly basis but at this point in time I am 8 (yes, 8) levels below the the top one-club (or should it be one-axe) golfer in this bureaucratic nightmare that is HP. Chances are the EDS guys will keep what they have and have extra levels of non-functional HP management added.

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