Why HP is smart to gamble on EDS

AFter 30 years in the computer business I give you fair warning EDS will strip HP dry. Look what they did to General Motors Corporation.

Just a matter of time!

It's all too comical. People from EDS and HP both complaining that benefits and compensation for employees diminished 5 years ago. Seems to coincide with the massive offshoring trend that exploded in recent times. When is the US going to wake up? It's throwing its talent to the lions…

What the US needs is to start balancing the shets here. To reduce the massive unemployment rate, it needs to bring it's industrial jobs back from China, and Service positions back from India. Neither is providing quality in its respective market. To do so, all gov't has to implement is a tax system that burdens these CEOs and thus makes it a negligible benefit to offshore anything.

Does somebody know how much money Mr. Wittenmeyer got when he was retired in december 2008 – I heard an amount of 55 million dollars? End of January many people in Switzeland will lose their jobs at EDS and on top of that some of their savings in their pension funds.

there is an EDS-HP office in the middle-of-nowhere in China. 98% of the employees graduated recently from run-off-the-mill tech colleges and universities of rural china. most of them do not have adequate education. I think the only reason they are there is because they only receive the equivalent of US$250 per month salary with hardly any other benefits. Does the quality of the service suffer? What do you guys think? You get what you pay for. I am NOT an American, I'm not even in the US. But if the US is the engine for the world's economy, why are people Stateside not yet going to their President or Senate or Congress? Once and for all, we should put an end to this nonsense of "OFFSHORING" and "OUTSOURCING". WTO deals and so-called "Globalization" is killing the US and subsequently, the global economy.

Well, after reading through the various comments, I can only conclude that the company is "represented" by the Leader(s) in the particular country.

It has been my privilege to work for EDS for many years and my loss not to have worked in HP. I guess at the end of it, the rise and fall of the company is in the hands of the leaders that "run or ruin" it!

Hope that those who have been eliminated will find peace.

I'm sorry. In my other comment I predicted:

HP will slaughter EDS.

Now, Mr. Hurd have communicated 26 400 positions to be, and I quote: "Eliminated".

Former EDS personell will prolly suffer the most.

It's all about the stakeholders, never mind about employees.

I ended up in HP because the company I worked for outsourced its IT services. HP is a terrible company to work for. It's like working in a MLM sales organization; profit, profit, profit. Forget pay rises, bonuses or benefits. Management grab those for themselves. Forget career developement. You're stuck in the job you're in until they can outsource your function to India – then your're fired.

We're told that we're being transferred to EDS – I was hoping that would improve the situation (how can it get worse?) but from what I read here I guess I shouldn't get my hopes up.

I'm seeing it from a nother perspective. As a former employee of Digital..later aquired by Compaq…as a Compaq employee ending up in HP.

Beware guys!

HP are ruthless. In the country I worked (Norway), HP conducted an ethnic cleaning process in the merger.

Merger? No, takeover.

I found "management" staff in HP to be a bunch of liers. By the time I was due to be laid off, it happened after a process where I could document lies.

You all heard "Nokia, connecting people!" …well, I changed it a bit…"Nokia, recording people!" Turned out to be my Ace of Spades negotiating the package.

Who thinks that there were any consequences for the "management" people involved? If yes, think again.

HP will slaughter EDS.

Why does this interrest me now…so many years later? Yes…due to the fact that EDS takes (or did by 01.07.08) over a lot of IT personell from a major global dutch oil company.

I work there myself…and yes…I see the signs already.

I am an EDSer for more than a decade with this company. I agreed with some of the comments here that we are unfortunately working in the company that has a bunch of thugs on the top running the show. That is a scary thought, isn't it? But it is very true. If anyone watched the townhall where Ron called some of the EDSers in the room bunch of wussies because they did not dare to ask him a question, then you will agree with me. The account where I work is very much the same. The management here do not even acknowlege that you exist. They will not even say "hi" to you when they bumped into you down the hallway. I know that HP is not that much better but since we are already one level below hell, there is no way to go but up.

I, for one, am welcoming HP with open arms. As an EDS employee for decades – I've watched our company go from great, to fair, to terrible. I'm not sure what the EDS Board of Directors were thinking when they brought on the likes of 'tricky' Dick Brown or the Buffoon Ron Rittenmeyer, but I for one look forward to the departure of these hack and slash, smiley faced, follow me or the highway mentality Management. As most EDS employees have stated "it can't get any worse than it already is". In all my years in IT I have never seen such an incompetent bunch of yahoos as I do today running this once great company. Thank God for the hard working employees of EDS. You are what keeps this company alive!! As far as I'm concerned, Ron and his cloneys can take their million dollar buyouts and please… hit the road. You certainly won't be missed.

Nice to see the merger with HP, is now prompting EDS to reduce its head count, its voluntary redundancy time once again, Thanks Ron!!

My UK account has been steamlined that much that it takes an escalation to senior management to make things happen. So it’s hard times ahead, I am already doing the job of three people but hey I am sure I can take on a fourth when my colleagues get made redundant (Pick me, Pick Me!)

I work for EDS in Winchester and I can tell you that the feeling here is that everyone is either getting fired or is planning on jumping ship as soon as they can.

Our highest call volume client in the center, Sprint, has such a horrible turnover rate that they have to start 2-3 training classes a week just to keep the project staffed. Meanwhile they're using that for the model that they expect the rest of the building to aspire to. So cutbacks and layoffs abound…if it gets to the point where our projects can't meet their client's metrics, it's our (the hourly employees) fault, not theirs.

My project over the past few years has been drastically cut while adding in more and more calls with little or no compensation to the hourly employees for the massive increase in workload. We've been told if we don't like it, we can go work at McD's.

The management as a whole here is the most corrupt system of favoritism and shady dealings that I've ever experienced; Ranging from things like giving tardies for even 1 min late to hourly while salaried low-level management shows up whenever they feel like it, to outright lies to employees and firing anyone who tries to bring any unethical dealings to the attention of HR. We even use other client's resources to support another client without either the knowledge of either.

Me and all my coworkers are already shopping around for other IT employment, so I wish any of my fellow EDSers that are still around when this happens luck.

The article's author said :

(In a Super Bowl commercial eight years ago, EDS memorably compared this tech management challenge to herding cats.)

Many years before this commercial ran, I heard that IBM had a problem with some of its advanced technology, that getting people to agree on certain design parameters, it was like herding cats.

So what if EDS made a mini-movie out of it?

This is a very interesting dynamic in the market place. I'm real curious to see the vaule in this when the current contracts with HPs competitors end in 3 years. Speaking mainly of Xerox.

EDS is and has been a company with great talent and potential that has been crippled for years because business line goals and objectives have long since diverged from client interests. There are excessive layers of management within EDS that need to be trimmed — a great opportunity for HP and for the people who sell and deliver quality services at EDS.

As a former EDSer, I wish the employees of both HP and EDS luck in there new beginning. I echo the comments of many EDSers who say how can it get worse?

Wow, EDS employees sound like Perot employees. No raises, bonuses, horrible benefits,layoffs, wonder who will buy Perot Systems…..

Yes…The EDS acquisition was quite a smart move. When taking the acquisition of Opsware (OPSW) taking into consideration that OPSW did all the satiilite driven networking and Data Center optimization for EDS. While OPSW wrote a new operating system (DCML) ata center markup language. Not a difficult transition and integration.

AMERICAN BUSINESS *CEO's rape U.S Future

1. Sell/Trade Intelluctual Property overseas.

2. Outsource employment overseas.

3. Layoff well trained motivated staff.

The measure of any CEO, is today's stock price, because each CEO benefits from Executive Stock, which has taxes that can be deferred. Your U.S. government allows this. So, when a CEO rapes one company and buys another company to rape, he/she makes his money twice, but cutting, slashing, and executive stock options. 10 years down the road, the CEOs will still have their millions, while the rest of us will be owned by some other country.

I had to laugh when one of my fellow EDS employees raved about how wonderful our benefits package is and how great it is to be here. He/She obviously hasn't worked here as long as some of us so he/she doesn't remember when our benefits were really worth something.

Also, I'm curious now that HP is buying us does that mean we might actually get printers, faxes, etc that really work?? Will we finally have equipment that is not older than my children? Will we not have to get management approval to buy new pens?

I, for one, am not very surprised by much that goes on around here anymore. What do you expect when you hire the most expensive used-car salesmen around and they ship our jobs oversees, cut, slash and burn everywhere they can and then take multi-million dollar golden parachutes when all the bleeding is done?

As an HP employee, I am excited by the prospect of the EDS acquisition making HP more competitive in the marketplace. This is just my opinion of course. The Compaq merger was not without it's challenges, but HP's ability to offer customers a comprehensive portfolio from servers to PCs to printers has paid off with continued gains marketshare. The acquisition of EDS can only serve to make HP the best equipped IT vendor in the marketplace. As HP VP Mike Feldman points out in his recent blog post, "The combination of EDS and HP will bring together best-in class hardware, software and services and will expand our reach in vertical markets such as public sector and healthcare."

Judging from other news reports, a lot of management in HP's Outsourcing division is filled with ex-EDS management. Consequently, it's not a surprise that that part of HP has seen an EDS-like series of cutting, underbidding for contracts, staff retention problems, and other things normally associated with EDS. HP's Outsourcing division also had the "it's a new year, try another hot idea and bring in new middle management" disease that EDS also has.

HP's outsourcing division actually has had good end line people working in the past. Most of those came from contracts they got, from CIBC, P&G, Delphi and others. However, what happens is that HP stifles raises and bonuses to one or two favorites per large group, so anybody else who's really good gets tired of being left out and simply leaves for much more money than they could have gotten at HP. (Sound familiar, EDS?)

HP and EDS are both finding wage inflation in places like India not too much to their liking, and are trying to move from India to even cheaper places (Malaysia and China for example), and I presume customers probably won't like that very much. After all, you get what you pay for, in this case, poor salaries beget poorly trained employees.

Finally, if the message below is right and HP's Outsourcing division gets moved into EDS, EDS will be able to keep it's culture and HP's Outsourcing people won't.

I would not be surprised if some contracts decide that they don't want to deal with poorer service and less innovation and simply dump HP/EDS and go without.

I feel sorry for the troops at both companies. Same old strategy for Senior Management, cut staff, cut salaries, do more with less, blah, blah. Sell, merge, cut some more = better parachutes for the Seniors. I'll be watching how this affects customer service from both sides. Smart business move? And the CEO of EDS GARAGE? Maybe he (and his buds) can forgo fat salaries (due to poor performance) for a couple of years to retain key personnel and restore the once fine reputation? Can't be any worse for the EDS garage folks and heck, HP's treated their staff slightly better since Foo Foo Fiorina left. This is what they teach in bus. school? Re-write the course, pls.

Google will buy Dell to match MSFT with HP , then… no software company will thrive on software only, impossible!!

I suspect that HP is being groomed by Microsoft before being taken over by MSFT. MSFT is still the company that lacks fiber as in hardware business.. Everyone else are in them along with software. MSFT should know that ….

Well. These fresh news have fall like a bomb in our offices. HP married with EDS and seems that we'll become a HP Company.

The truth is that EDS's low stock prices values were (since Mr Dick -MILLION & NAVY- Brown) an invite for the first Big One to buy us.

HP has made a good bet. EDS Employees need to be respected by both Sr. Management, since they are the best of bread in what they do. EDS is the best IT outsourcer company in the whole world.

"Elevate your game"

As an EDS employee in Winchester KY, I cant see us being any worse off than what we are now. We have crappy benefits with the exception of the vacation we receive. Our medical is so high we cant meet the deductibles so we can get proper health care. EDS saves millions by cut backs and etc.., but the employee's never see any of it, unless of course they are upper management. It's very true that Temps start out making more than tenured employee's. Do they care? No!! If we don't like it, we can leave. Upper management gets credit and raises for all the work hourly employees do and most of the supervisors are so incompetent they have no idea about the clients they support. EDS likes the leverage process, which is fine, but they save mega bucks by making their agents work several different clients at a time. Just another way we get screwed over and they gain. They wont even talk of giving us a cost of living raise, knowing that gas expenses alone probably take away 1/4 of our checks. Thank you EDS. Thank you Ron Wittenmeyer for you continued support.

Integrating EDS into HP Services? EDS is going to be setup as a separate business so it is more likely that HP Services will be stripped and merged into 'EDS, an HP company'. I'm working for HP Services and the last few years there has been nothing but cost cutting to the extend that we 1) lost the majority of resources, especially the better ones. 2) no salary increases but cutting benefits one by one 3) no budget for anything that even looks like an investment into the future, even training. So now we're stuck with thousands of frustrated employees and are unable to find knowledgeable resources on any of the newer technologies. And how to solve the problem: buy EDS, services is their core business, they should know… yeah right…

I am seeing this “smart” and “strategic” move for HP a step forward in purchasing CGI in the next few years. Mean time a warm "welcome on board" to all the EDS employees.

Mr. Fortt clearly doesn't know what he's talking about if he views services as a "high profit" opportunity for HP. In fact, services are a low-margin business for all of the key players (check the earnings reports, Mr. Fortt). This is why HP's stock is selling off right now. The value comes from combining services with other parts of the business, especially software, where the profit margins are much higher. That will be the integration test for Mr. Hurd.

From Jon Fortt: Some services are higher-margin than others. EDS has been trying to move out of the lower-margin stuff, and they're saying they would continue that effort under HP.

IBM and Xerox get together and knock the crap out of them!

Better HP bought us than IBM!!!!

Well, EDS has been ripe for the picking for years. The HP acquisition is a welcome one in the sense of having a large North-American based company take us over, rather than foreign corporations. That being said, these big companies are all about slashing costs and as in any acquisition, there are bound to be layoffs. What will be the most interesting would be whether EDS is able to retain Xerox, one of their biggest clients. Xerox, of course, is a direct competitor to HP.

I welcome a change in senior management. Rittenmeyer has taken what Michael Jordan has improved over the years and is doing the slash and burn approach domestically, while he is shipping all of our jobs offshore. Hopefully HP can stem the bleeding. As an EDS employee, I am waiting with bated breath, but also anticipating hopefully some positive changes to the company structure.

Looks Mark Hurd is on the way to be the Louis V Gerstner (the guy who turned around IBM) of Hewlett Packard. As mentioned by most, HP's main concern now is just costcutting and profitability. Even though this gonna be a win-win deal for both HP and EDS, it doesn't look so good for the EDS employees. Welcome to the HP way! Like it or leave it.

John Fortt – you are wrong. This is not a smart move for HP. And why on earth would HP "gamble" with money that belongs to shareholders, not management. If I wanted EDS in my portfolio, I could have bought them without paying a premium. Like most acquisitions, this will be a value-destroying proposition. These tech CEOs just don't understand that cash belongs to shareholders and shouldn't be flushed down the drain with empire building acquisitions. What is HP's expected ROI on this transaction?

Two turkeys do not a peacock make.

From Jon Fortt: Many people agree with you. Of course, they said the same thing about the Compaq deal.

HP will inherit several large contracts worldwide they can't change.

For example the 8(?) billion$$$ Navy contract thru 9/30/2010 that probably won't show a decent profit until the contract ends and they can sell the resources. It can't be outsourced to non-americans and consists of Dell computers and Xerox printers.

I'm guessing HP can handle this but EDS has a history of underbidding just to rack up the contracts.

There are still many hurdles to be cleared for this deal, but if it closes EDS should expect dramatic change and spinoffs for underperforming departments. I agree with what has been said about the cost focus of both senior management heads. Any input from people in companies previously acquired by HP about their severance package approach?

The deal will most likely go through. EDS employees, (non Snr. Mgrs), LISTEN UP! Prepare for the New HP Way:

- NO Salary (Merit) increases for a while (4yrs)

- Yep, if you're smart, you KNOW, there will be MASSIVE lay-offs for the subsequent 3-4 yrs. That's how the likes of Mark Hurd's get to make their millions, and get showered with accolades from Wall St.

I used to work for HP and Carly Fiorina did the same with Compaq. Thank God for my Ivy league graduate degrees! I jumped ship for a very lucrative offer right here in Silicon Valley, and having living well ever since. I still feel very sorry and sad about lots of friends and colleagues who were "cut-off" at the knees at HP after the Compaq deal. It was NOT pretty!! People, think smart, and look elsewhere if you're not in Senior Management! Who knows, even a Gen Mgr. or two may get the axe too!!

Lynn in Atlanta. . . same issues in the Winchester, KY facility when I worked there 4 years ago. When I started the job I am at currently, I was tickled to death when they brought me a box of office supplies for my very desk. It was like Christmas. I no longer had to purchase office supplies on my own dime.

Wage disparity was bad and the abuse of temps was sad. I worked there for almost 2 years before I was hired full time. While a temp, I was making over 11 an hour and sitting right next to a full time employee making 9.80 an hour. When we would bring it up, they would tell the full time employees to quit and apply again through the temporary agency.

As an EDSer, I thought I just got out of a mud hole. Am I getting in another one?

As has been said by others, employee morale is appalling in EDS at present due to poor staff management and little if any recognition of performance, and almost non-existent training programmes which constantly get cut back on. The staff benefits are OK, but no more than that. But it pays the bills but that's all.

Things can only get better……..so let's give HP a chance to either prove or disprove themselves and then move on if needs be.

I know IBM and I know EDS worked for both, not the best companies to work for, going on the service they give their customers it’s a miracle there not bankrupt yet, modern day miracles still exist, HP should not argue with these fools or associate with either, people looking in from outside won be able to tell the who the fools are

We could have paid a financial advisor to do what Hurd has done at HP. There's no innovation here, we buy innovation by way of aquisition. Then we cut costs to maximize short term profitability. We'll see how we look in 4-5 years…

I would hate to be on the EMC account team for EDS. Milking EDS for years is right. There is still a sour taste in HP's mouth from the failed partnership with EMC years ago. Interesting to see how long it will take HP to transition

Its a marriage of two laggards. Two laggards don't make a winner together.

I'm sure this will send create ripples at Armonk office of the Big Blue (IBM)..

Sam must be enclosed with his close advisors today….

IBM should go ahead and buy Accenture…

Based on my experience as an employee acquired by HP I can tell you that be prepared for nasty surprises and frustration and indentured servitude. Last but not the least voluntary turnover will be much larger than involuntary. Somehow Mark Hurd thinks he can sell more servers and PCs by selling services, customers are not stupid.

I used to work for the EDS in Winchester, Kentucky. Management there was terrible and the business as a whole didn't give a hoot about the employees that kept the business running. I hope HP keeps EDS in Winchester, but turns over the management and improves the terrible turn-over problems and improves employee morale.

Gary Kaiser from Boise, ID you are absolutely right. Mark Hurd is very good at what he does which is maximizing shareholder value in the very short term.

I am in EDS shanghai,we don't want to be in HP.many of our colleague are leave HP for EDS.Don't know what will they do with us.

As an EDS employee for the past five years maybe I’ve been drinking the cool-aid but EDS has the best benefit package of any company that I’ve worked for. Three weeks’ vacation from the day you first walk in the door, matching 401K, unlimited sick leave, paternity leave, two months full pay short term disability, a decent health plan and health re-imbursement accounts are a few of the benefits that EDS provides.

What most of the nay-sayers don’t tell you is that most of the layoffs that occurred this year were the result of EDS exercising a somewhat generous early retirement option. I know quite a few people who left EDS with a very generous retirement package.

We’ve won several very large contracts ($1B+) this year and if nothing else I’m glad to see our stock price starting to reflect the value of the company.

HP is all about layoffs and cuts for the people that do the work, and bonuses for management. From all the comments about EDS, this buyout should fit right in.

Buy EDS, cut them to the bone; freeze salary, benefits, and bonuses for the combined copanies (yet again) under the guise of 'integration'; and pay management retention bonuses. Offshore, excuse me, "rightshore" as many jobs as possible, and deliver less and less to the customers.

Heres the real news for all the IT managers out there : Buy consulting from IBM, storage from EMC, and servers from Dell.

EDS stopped taking care of their employees several years ago, so it can't get much worse.

As an EDS employee, I would welcome the change… there is nowhere to go but up!

HP may be making a mistake financially as EDS is all about top management and there bank balances. Staff are in two minds.

We in SA work on EDS's biggest client. We have not seen salary increases in 4 years now. inflation here is 10%. interest rates are 15% gasoline is over $4 a gallon yet only management get bonuses and salary increases.

We have been told to adhere to FIFO.

IF we feel we cannot add to EDS or advance our careers then please leave.

Ron Rittenmeyer and team send out messages telling us how well EDS is doing but all staff on the ground are not seeing any benefits for the hard work and dedication.

Both Hurd and Rittenmeyer are hatchet men. Look at Rittenmeyers track record and you will see he turned around companies by sacking people. He has done the same in EDS. He has moved up from nowhere getting rid of everyone in his way. Turned us into small profit. Now he sells us to someone else who can cut more jobs. The big thing for HP is that they get a skill base they havent got in services, sales and architecture. They get to take over some huge mega deal contracts that are making money! They can then sell their hardware and solutions into these deals. Think of UK Govenrnment deals, European Banks, Vodafone – the European contracts that have been won recently are massive compared to US deals. These deals have been won ahead of IBM. Also look at the Alliance relationships EDS have which align against IBM. Makes sense.

Well, since HP's consulting and intergation business is going down the tubes, they have to think of something. The downside is that either the current incompetant HP management will manage the resulting group or EDS managers will and this will irritate customers and staff. I guess that EDS would have the edge since at least they have some managers who have actually done consulting and integration rather than just managed Excel sheets and judged sales forecasts….

I think it will be end of an ERA if this happens in IT services industry.

40+ years, $1000 bill to start with…now thinking to sell off this Giant would be a stupid idea.

I have purchased and used server hardware from all the big vendors before and I must say HP is the winner (by far) when you factor in reliability, support, service and cost.

Everyone has his/her own preference but don't be so negative on HP. They have yet to fail me.

Jon Fortt, That was spot on, you have done your homework.

The one problem here is EDSs board and this news being leaked doesn't help. With anything it gives EDS a new card… and they are greedy…

Mark Hurd is about short term gains, but has no long term vision. He is a slasher, not a builder. Ten years from now HP's products will be obsolete, but Hurd will be long gone. Slashing another company's long term viability. Don't believe me? Call HP tech support.

Well you must not work for EDS or you are living in a bubble if you do.

1. Massive Layoffs have been occuring for the last three or four years. EDS laid off 2,300 two weeks ago and are aiming for almost 8,000 by end of this year. We are so thin in some areas we can not provide services we have promised. And some people have to do three jobs.

2. Most of EDS has seen no raises in well over two years now. The only raises seem to go to the mangers.

3. We can not even get note pads or pens unless we take them from Hotels, Vendors, and Conferences and stick them in the supply cabinet. And even then they lock up the cabinet so you have to get someone with a key to open it.

4. Our Data Centers are also running out of power so we have had to tell clients they have to chose which servers are more important the new one they want to add or the old one. That is not good business.

So the only thing remaining they can take away are the benifits tiny as they are now. I don't really see how life at EDS can get much worse.

EDS Employees have gone through enough. EDS is one of the worst companys for layoffs and outsorcing its own departments. If HP gets in.. well 50% of the people will be layed off… and oh yeah… HMOs for everyone.

HP, Dell and SUN all have something in common…the ability to Fumble.

Good news for ACS, Accenture, IBM

Bad new for EMC who have been milking EDS's customers for years

Hopefully HP is paying for real tangible value, and not what has historically been preceived as hype and promises.

I also worry when people assume, the old adage, ASS U ME.

EDS employees, if HP does this deal, prepare for

- no raises for years

- benefit cuts

- massive layoffs

It's the New HP Way.

Hurd has done everything right to date, so you must assume he has a plan already planned for integrating the appropriate pieces of EDS and quickly sizing the business for profitable growth. As an IT competitor, I will hate competing against HP even more if this thing works out.