HP Finalizes EDS Acquisition: #2 in IT Services; #7 in SAP Consulting Services

Now that it's official, it's time to see what effect the addition of EDS will have on HP's IT services business!

To start off, in the U.S., HP adds EDS' #2 position behind IBM to become a $17 billion IT services (Project Services+Outsourcing) company in the U.S. versus $20.1 billion for IBM in 2007 (according to PAC figures). For HP, this is a jump from #14 to #2.

For the SAP Consulting Services segment in the U.S. during the same period, the addition of EDS to HP would place the company as #7 in the U.S., up from HP's #15 position. So unlike the effect on its total IT services (and in particular, outsourcing) position, HP will be strengthened in the SAP space, but clearly will still be in "challenger" territory.

So what will EDS bring to the table for HP around SAP services?

While both company's took a very infrastructure-focused and "cost of running SAP" approach to clients, EDS will improve HP's position in Brazil and in the U.S., two areas where HP services related to SAP were quite weak, and will help expand HP's SAP client base beyond HP's manufacturing/SCM comfort zone.

At the same time, in my opinion, HP+EDS's global capabilities (business consulting; industry focus; SAP skills in each country) will still far from the leading players (SAP Consulting, Accenture and IBM), since both suppliers were still in a development mode as far as their respective SAP businesses are concerned prior to the acquisition. They were far from covering all topics, with a solid base of resources in all major regions/countries.

For more in-depth market research go to: www.pac-online.com/sap.