| HP has been growing as a company for the last | | | | improved. Thus, to fill this obvious lack, HP |
| 25 years. Tracing HP's history of merger | | | | cleverly bought EDS. EDS is expected to improve |
| acquisitions in the last 25 years, it was only in | | | | its software business revenue. |
| 2008 that it was able to buy a company as large | | | | However, the data shows no improvement at all |
| as Electronic Data Systems Corporation. In 2008, | | | | after the merger acquisition. The explanation for |
| HP announced a deal to acquire EDS Corporation | | | | this is that HP is still adjusting from the new |
| for $13.9 billion dollars, $25 per share. The | | | | acquisition and from what it did-made HP the |
| company offered a 30% premium to the | | | | biggest IT company today. |
| pre-deal-price of EDS stock. The offer has been | | | | Most probably, there will be more corporate |
| approved by the boards of both companies. This | | | | acquisitions to come for HP in the future. HP is a |
| deal changed HP's destiny in the world of | | | | highly complex company. On the one hand, it has |
| information technology. | | | | been able to improve and creatively innovate |
| HP's newest merger acquisition is challenging IBM's | | | | itself in the last 25 years. It is ahead of the |
| supremacy in IT services. IBM asserts the biggest | | | | market in terms of its IT services, business |
| share of the international IT services market with | | | | management and hardware. |
| 7.2%, according to Gartner Inc. EDS is second | | | | Because of this, it has become a much bigger |
| with a 3% share. HP is fifth with 2.3%. As with all | | | | company with a large and multifaceted portfolio |
| huge scaled merger acquisitions, there will be | | | | of offerings over time. On the other hand, the |
| organizational and leadership difficulties that will be | | | | software business side of HP is still at a transition |
| brought about by differences in corporate culture, | | | | point. While HP has done extremely well with its |
| but this new corporate acquisition would definitely | | | | performance management and testing business, it |
| give much upside for HP. | | | | has had a hard time creating an overall software |
| According to CEO Mark Hurd, their strategy is to | | | | portfolio. |
| invest as much as they can on improving their IT | | | | But HP's merger acquisition EDS was both a big |
| service group. Because of this, some analysts | | | | step and a stepping stone for HP. It brought a |
| predict that HP as a whole will be growing at a | | | | new set of customers who would have never |
| steady 8% pace rate in the next 5 years. But | | | | considered HP before. And most importantly, EDS |
| others predict the opposite, as numbers shows | | | | brought a wealth of home grown enterprise |
| HP's growth decline for the past two years. | | | | software technologies, frameworks, and best |
| Fiscal Year Q1 Product Revenue Q1 Service | | | | practices that will help mature HP's software |
| Revenue Q1 Financing | | | | portfolio. It will probably focus on improving their |
| 2008 $23.1 billion $5.3 billion $90 million | | | | software. |
| 2009 $18.6 billion $10.1 billion $89 million | | | | Overall, HP is still learning to get the hang of being |
| From this data, it could be noticed that the decline | | | | the biggest IT company in the market. It needs |
| only occurred in product revenue and in finance. | | | | to work extra hard to maintain that position while |
| HP had been actually improving on its IT services. | | | | learning the tricks of the trade they don't know |
| Its software is its weakness and it needs to be | | | | of in the past. |