Hewlett-Packard's recent EDS acquisition strategy becomes more visible

Posted Feb 26th 2009 3:36PM by Brian White
Filed under: Deals, Hewlett-Packard (HPQ)

When Hewlett-Packard Corp. (NYSE: HPQ) paid billions for computer services giant EDS in 2008, the reasoning was clear: HP wants to be in the "IBM" business. You know, the one that serves up and retains lucrative computer services contracts that mean much more to any bottom line than razor-thin hardware margins. It appears HP wants to do both.

Not only has the computer maker been the world's largest computer manufacturer for a few years running now, it has its hands in several profitable hardware businesses (mainly printers) and software businesses that balance the business when the goings get tough in the computer server and PC business. What about support and services?

HP may be ready to bundle a complete business unit from its Communications and Media Solutions business division with the expertise supplied from the EDS division, and give the unit operating earnings responsibility separately from the main HP business. This analysis over at The Motley Fool nails this pretty well. Disparate products and services from multiple vendors aren't the norm any more -- certain segments of customers want entire start-to-end solutions. HP seems to be slicing itself in such a way to be able and serve that request.

Tags: EDS, EDS acquisition, EdsAcquisition, Hewlett-Packard, HPQ