Hurd Plans to Buy EDS
Mark Hurd, Chief Executive Officer of Hewlett Packard, announced the company’s plan to acquire EDS as one of its strategies to bolster its foothold in the global market. Many have been surprised by the way Hurd is doing reconstruction of his company and the measures he has undertaken to save HP from the brink of a company meltdown.
What is shocking though is this recent deal with EDS.
EDS has been having a rough time keeping up with its top competitor, IBM. EDS, the world’s second largest IT services vendor, has been on a downhill slide for quite some time now, which makes an acquisition very risky business. Second, EDS has not been able to get enough deals to stay afloat with its competitors. Third, the HP-EDS deal is worth $13.9 billion. Now that is a lot of money; losing it on a deal gone wrong can be devastating to Hurd’s career as HP’s main man.
Hurd, as always, is ready with his defenses. He already knows the numbers, the risks, as well as the benefits. They buyout will double HP’s global coverage, especially in the outsourcing industry. EDS will be HP’s leverage for worldwide IT services. EDS stockholders on the other hand, think that the deal will be a good exit strategy for EDS.
Whether or not this buyout will be beneficial to both companies, only the future can tell.
Larry Page is profiled in Forbes magazine.
Other technology leaders such as Mayo Shattuck are profiled on Leaders of Technology.
Mayo Shattuck is profiled on BusinessWeek.