How much of HP’s spotlight did IBM steal?

Posted: September 16, 2008 in Technology
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Its a big day for HP today because its their securities analysts meeting today, however the main concern of the tech community is HP’s unveiling of their strategic reasons to acquire Electronic Data Systems (wikipedia).

Last Thursday IBM made a couple of announcements as well to steal HP’s thunder.

I.B.M. has lobbed a preemptive strike of sorts against rival Hewlett-Packard. Late Thursday, it announced four fresh services contracts just ahead of a Monday meeting in Silicon Valley where H.P. is expected to explain the strategy and structure for its new acquisition, Electronic Data Systems.

The flurry of announcements marks the start of a protracted marketing and technology battle between the technology industry’s largest companies.

One of the deals secured by I.B.M. took place in the Philippines with PSBank, the second largest savings bank in the country. I.B.M. was eager to point out that the bank shifted from an Oracle database running on H.P.’s hardware to performing its online transaction processing on an I.B.M. mainframe.

The other deals included a seven-year outsourcing agreement with the PTT Chemical Public Company of Thailand, a new data center for Saigon Commercial Bank in Vietnam and a technology agreement with Skynet in Lithuania around Internet protocol television, or IPTV.

I.B.M. was not terribly subtle about celebrating the international flair of its services and technology expertise. But it’s not really subtlety that the company is after when it comes to H.P. and the services battlefield.

“HP will claim next week that they have some great new capabilities,” said David Parker, the vice president of strategy for I.B.M. Global Services. “I will be surprised if they are able to be very specific about that. It is still yesterday’s business model.”

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HP has already sited some reasons for the huge acquisition

At its securities analyst meeting today, HP will unveil a strategic plan to establish a powerful position in the evolving enterprise market.

With the acquisition of EDS, HP has the industry’s most comprehensive portfolio of IT solutions to help customers manage and transform their technology environments. The company also will announce plans to restructure the EDS business group to streamline costs, invest in growth and drive shareholder value.

Enterprises are facing an explosion of digital content, aging infrastructure and constrained resources. Consequently, chief information officers must rethink their technology environments and choose to manage it themselves, outsource it or receive services through the cloud. With EDS, HP is a leading globally scaled service provider that combines innovation, a stronger product portfolio and expanded service delivery capabilities.
“HP now has the broadest technology capabilities in the market to meet customer needs today and in the future,” said Mark Hurd, HP chairman and chief executive officer. “HP has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of HP and EDS for our customers and shareholders.”

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However we are already seeing some negative effects like this announcement of HP’s massive cut down of jobs

US technology giant Hewlett-Packard has said that it will cut 24,600 jobs worldwide over the next three years as part of its integration with computer services firm Electronic Data Systems.

The company employs 4,000 in Ireland in locations in Leixlip, Dublin, Galway and Belfast. A spokesperson for the company here said HP Ireland has no knowledge of how many, if any jobs will go in Ireland as a result of the global rationalisation. No numbers had been set for any country, she added.

World leading computer maker HP bought Texas-based business services outsourcing titan EDS in August as part of a $13.9 billion deal that aimed to create a global powerhouse in computer services to compete against IBM.

The workforce reduction aims to ‘streamline the combined company’s services businesses,’ and once complete is expected to ‘result in annual cost savings of approximately $1.8 billion,’ HP said in a statement.

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