The Hindu Business Line : HP expects EDS to extend service offerings

Recently in Penang Hewlett-Packard Co expects recently acquired Electronic Data Systems Corp to play a significant part in furthering its services portfolio in terms of offering newer services and reaching out to newer markets.

This comes at a time when services is expected to drive growth in the next year for some of its business divisions such as the StorageWorks Division, which is a part of the Enterprise Storage and Servers Business Unit, and spending on infrastructure is expected to come down.

In a weakening business environment, customers would leverage existing infrastructure to reduce cost of operation which would create demand for services such as virtualisation and consolidation, HP said. Virtualisation is a technology that creates several virtual machines from one physical machine.

When asked how the company would meet the surge in demand for these services, it said much of it would be done by EDS, which HP bought for $13.9 billion to challenge IBM Corp for more technology service contracts.

Biz track

Media reports have suggested that for the latest fourth quarter, HP has seen some softness in its printer and server business though it has been offset by growth in technology services and notebook computer sales.

“HP acquired EDS recently, and a part of the expertise it acquired had to do with infrastructure, and virtualisation is part of infrastructure,” said Mr Jim Wagstaff, Vice-President of StorageWorks Division in H-P Asia Pacific and Japan.

The company said there is not 100 per cent overlap between EDS’ customers and HP’s, and that the opportunities for synergies are large. “In terms of big customers of theirs and the big customers of ours, there are actually enough differences to make it interesting,” said Mr Dave Roberson, Senior Vice-President and General Manager of HP’s StorageWorks Division.

Cost-saving synergy

Mr Roberson said HP has the opportunity to engineer its products into solutions provided by EDS. “By becoming a part of HP, their reach into market becomes far broader and our service capabilities become much broader,” he added.

The market is looking at it as a cost-saving synergy acquisition and the company would certainly do everything to realise those benefits, said Mr Roberson. But over time, it would help the company go into different kinds of markets, or solve different kinds of problems that we cannot do today.

“The opportunities for synergies are large. It is up to us to use these synergies over time and see how we can do things we haven’t done before.”

More Stories on : Outlook | Software | Mergers & Acquisitions

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