See your link here
HP buys EDS: You fools! You fools!
13 comments- TAGS:buyout, Compaq, EDS, HP, layoffs, Mark Hurd, merger
- IT TOPICS:Careers, Enterprise Software & Services, Management, Servers & Data Center, SOA & Web Services
Does any major technology company have a worse record when it comes to buying other companies than HP? I mean come on. Do you recall how well the Compaq buy out went? Come to think of it, where is fired CEO, the genius behind that deal, Carly Fiorina working now anyway?
Sure Compaq may have worked out in the long run, but people who argue this seem to skip answering the questions: "Did HP really get anything from buying Compaq?" and "Couldn't HP have developed its hybrid PC sales model without Compaq?" Seems to me, HP just wasted 25-billion big ones on Compaq.
I find it really hard to understand the logic of HP buying EDS in the first place. Yes, I get it, HP wants to more of the services biz, but EDS, while a monster company -- $22-billion in revenue, has been treading water for years.
EDS' stock in trade is infrastructure management and custom application services. Wait, doesn't HP already do infrastructure management? Is this deal really going to expand HP's service offerings?
Besides to do these kinds of services well, you need experts. Kids with their freshly HP ink-jet printed diplomas aren't exactly ready to pull together custom application bundles for Fortune 500 companies. So, what does Mark Hurd, HP's CEO say? He says things like "squeeze costs" and "If we do get the cost synergies done-and we will-we think this thing has tremendous opportunity." Hurd doesn't want smart staffers he wants automation.
Meanwhile, over in EDS land, a friend of mine passed me a memo from their CEO, Ron Rittenmeyer, which included the phrase, "Obviously, this news means major changes for everyone involved. There are many questions to be answered and decisions to be made in the coming months."
Let me translate that for those of you who aren't familiar with corporate executive double-talk: "We're going to fire your asses." EDS staffers -- ah, there's another one on my IM now -- know exactly what this jargon means and they're already looking for new jobs.
By the time, this deal closes in the second half of 2008, what's already a questionable buyout by HP, will have become a complete waste of money. EDS staffers with real skills will already be out the door. Afterwards, it will be Mark Hurd's turn to try to explain to the board exactly what went wrong this time. I hope you have better luck than Carly did Mark, but I doubt you'll be able to make a better case for keeping your job than she did.
Print
Email this
Digg this
