HP completes EDS deal

So the HP acquisition of EDS is finally a done deal. The $13.9b deal announced back in May, has created a services business with annual revenues of more than $38 billion (based on FY2007 results) and 210,000 employees, operating in more than 80 countries. HP+EDS is now the second largest IT services organization globally (IBM is top dog)

EDS will become HP’s fourth line of business; retaining its Plano HQ. Ron Rittenmeyer remains as EDS CEO. Indeed, HP is folding its Technology Solutions Group into EDS. Here in Europe, Bill Thomas remains as Senior VP EMEA. You can see the rest of the Executive Line up on the ZDNet site here. I also understand that Sean Finnan has ben named responsible for combined services business UK and Ireland (one of the roles he had already in EDS)

In their Press Release today, HP made great play of the fact that, by value, this is the largest ever in the Software and Services sector and the second largest ever in the technology sector. The largest was, of course, another HP purchase – that of Compaq back in 2002. That was bad strategy, badly executed. It brought the end to HP’s CEO and nearly busted the company.

HP+EDS is actually ‘good strategy’ BUT the really risky part of the job is only just starting. Can HP execute a reasonably smooth integration? Can HP avoid a ‘clash of cultures’? - the reason why most mega acquisitions fail. EDS is about services – not products. Services are about people, their skills and relationships. EDS has a strong culture and some damned good people. I’ve long rated Bill Thomas as a “Best of Breed” and am therefore glad that he is staying on. But why didn’t he get promoted as many (like me) expected? What is going to happen to the many really excellent managers that report to Thomas in EMEA and specifically in the UK? I await the answers and will, of course, bring them to you as soon as I can.