Is Hewlett-Packard's acquisition of EDS a good idea?
It'll beef up HP's IT services
Side Score: 10
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No: EDS will drag HP down
Side Score: 4
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HP's stated goal is to be #1 or #2 in all the markets where it competes. Services was the obvious exception to this worthwhile goal. The Compaq acquisition was problematic because there was significant overlap. Here the only overlap is in management and administrative functions. There will be significant cuts here to create synergies. HP will gain an army of valuable, talented and productive IT consultants. Side: It'll beef up HP's IT services
4
points
HP will benefit heavily from the skill-set of the employees they just purchased. As an IT professional, hiring qualified personnel to fulfill consulting roles is a exercise in futility. For many of the candidates we interview, the most impressive factor in the interview, is the extent of lies presented on the resume. HP not only purchased a self sustaining revenue stream, they purchased over 100,000 qualified pre-screened employees. As soon as the sale completes, they also become the second largest IT consulting firm in the industry. Side: It'll beef up HP's IT services
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Didn't HP learn their integration lesson with the nightmare that was the Compaq merger? HP needs to focus on it's core business now that it finally has fully integrated HP and Compaq and begin to realize the synergy of that acquision. Taking on more integration efforts would really drag the company down and take the leadership's eye off the prize of personal computers and printing. Side: No: EDS will drag HP down
Mopar (Chrysler) and Mercedes was said to be a great merger. It didn't work, and might end up killing Mopar in the long run. HP has a radically different history than EDS when it comes to the type of person that is recruited, the working environment, as well as the attitude of management towards the value of its human assets. While things have changed over the years, the cannot have changed enough to merge the Borg with Starfleet Command. Side: No: EDS will drag HP down
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