Over the past 12-18 months, Cloud computing has been increasingly shifted from the ether to ground level and become a powerful – yet practical – computing alternative for organizations across all sectors. And while much of the cloud computing buzz to date has revolved around Software-as-a-Service (SaaS), Hewlett-Packard’s announced $13.9 billion acquisition of EDS (headquartered in Plano, TX but with a significant presence in Northern Virginia) may in fact be a nod to HP’s hardware as a service aspirations.
HP confirmed it is buying EDS at $25 a share, a 32.5 per cent premium to EDS's Monday closing price of $18.86. With EDS, HP will more than double its services revenue and create a new business group: EDS – an HP company, which will still be based at the Plano executive offices.
HP CEO Mark Hurd remarked that “The combination of HP and EDS will create a leading force in global IT services.” The cloud infrastructure services approach will get a boost from EDS’ 100 global data centers, and follows HP’s November 2007 acquisition of EYP Mission Critical Facilities, Inc.
EDS ranks No. 10 on Washington Technology's 2008 Top 100 list of the largest federal contractors. When it comes to beefing up its Federal IT and infrastructure outsourcing offering, it appears that the third time might be the charm for HP. After earlier failed attempts to purchase CSC and PWC Consulting, HP is finally poised to offer a fresh challenge to IBM in the government outsourcing arena.
After today’s announcement, EDS might have to change his mantra from “ordinary people, extraordinary achievements,” to “ordinary people, extraordinarily larger transactions.” Either way, ExecutiveBiz “New At The Top” executive Dennis Stolkey, who took over as Vice President and General Manager, U.S. Government at EDS less than one year ago, will certainly have a unique new challenge in front of him.