Hp's technology services power play

Hewlett Packard Co.'s acquisition of global technology services company Electronic Data scheme Corp., say analysts, will challenge IBM's place as marketplace leader -- if HP with success integrates the two companies. As everyone knows, integrating is where the India rubber meets the road in M&A.

The dealing -- which totals $13.9 billion -- is expected to close the sec half of this year and will probably more than two-base hit HP's services revenues, which amounted to $16.6 one million million last year. HP says it will establish a new concern group that will be headquartered in Plano, Texas, EDS's home.

EDS is a plum acquisition based on HP's stated objective of strengthening its service business. EDS has been highly successful in edifice powerful and lucrative alliances, including its legerity Alliance, a alliance of market-leading technology and concern service supplier including Cisco scheme, EMC, Microsoft, Oracle, SAP, Sun, and Xerox. In this composite, multi-partner coaction, EDS and its spouse collaborate to designing, build, and run a services platform and develop technology-based services for companies in a assortment of industry sectors. This year, the confederation won an award for best pattern from the Association of Strategic Alliance professional person, a testimony to the work and endowment of EDS's confederation managers because alliances are only as strong as the people that run them.

Analysts are already speculating about all of the cost cuts this matrimony can bring about, including staff retrenchment. But any IT service company's most valuable asset is its employees. And talented employees have been known to flee companies if they think layoffs are being planned.

HP has been criticized for poor direction relating to some facet of its acquisition of Compaq in 2002, so employees, investor, analysts -- and surely competitors -- will be observation closely.