commentary Hewlett-Packard's contemptuous termination of
the 47-year-old EDS brand in a five-paragraph statement filled with
marketing hogwash today sends one clear message to the
In plain English, it reads: "We don't understand what we paid
US$13.9 billion for."
No IT professional in their right mind could possibly believe
that the meaningless title "HP Enterprise Services" could have more
weight in the highly competitive IT services market than the
enduring and powerful Electronic Data Systems brand created by the
company's founder Ross Perot back in 1962.
Does this remind anyone else of those IBM divisions who nobody can keep
straight? Global technology whatsit? Systems and technology
hoohah? What is this, a battle of the incomprehensible division names?
I'm not a marketing expert, but it seems to me that when a
company spends 47 years almost single-handedly defining the IT
outsourcing market, it's earned some credibility in the minds of
its customers. And it's earned the right to keep that name and not be morphed
into a division of a company whose primary brand association in the
market is with desktop PCs (and these days, laptops).
You're from where? HP what? Oh ... right. You mean EDS! Why didn't you say so?
You can imagine the reaction as 10,000 former EDS salespeople
call their clients over the next year. "You're from where? HP what?
Oh ... right. You mean EDS! Why didn't you say so?"
But if you've been watching the fallout from HP's EDS buyout as
closely as I have over the past year, the move will make sense as just one in a long chain of signals that HP does not fundamentally
understand the beast that it has brought into its den.
The move on its own was expected and legitimate. But HP's
attitude towards the cuts revealed the depth of its ignorance about
EDS Australia managers were frantic with stress at the time, due
to the fact that they were not allowed to disclose specific details of
the move to the teams they had painstakingly built up locally
over the past decade, sometimes poaching staff from rival
outsourcers to do so.
Then there was the fact that HP did not appear to have made the
normal overtures to the unions representing EDS' highly unionised
and structured workforce, either in Australia or in the UK.
Those with long memories will consider this outrageous given the long-running union
disputes within EDS half a decade ago and even before. As outrageous even, as Telstra's disdain for dealing with unions before its new CEO David Thodey extended the olive branch.
Lastly, there is the move to combine the EDS business with HP's
existing division selling hardware into business and government,
under the "HP Enterprise Business" label announced today.
The move will make sense as just one in a long chain of signals that HP does not fundamentally understand the beast that it has brought into its den.
This move smells strongly of an attempt by HP to focus the EDS
business on selling and maintaining HP's own hardware, rather than
the more vendor-agnostic approach EDS has taken previously. If you
were to go back several years, EDS staff would have no problems
inking managed desktop services deals including hardware from IBM,
Dell and even smaller groups like Toshiba.
But will this still continue to be the case, or will a long line
of IT managers start to complain that EDS only likes to admin HP
There's one central truth at the heart of HP's fundamental
EDS disconnect. At it's heart, HP is simply not a services
organisation. It is a manufacturing company. Its business has thus
far been built on creating and selling technology, not on human
In contrast, EDS is a services group dependent on hiring and
retaining human talent — people, not machines or IT systems. If you've been around the block in the IT industry, you will
have seen this problem before many times.
It was the reason that Telstra could never quite understand the
IT services business Kaz which it virtually destroyed in an attempt
to mould it to the telco model, and it's the reason Dell's services
business never really broke into the IT services market and ended
up buying Ross Perot's other IT services group this week.
But that doesn't excuse HP's behaviour during the EDS
acquisition, nor will it save it from its own hubris.
And EDS' staff will certainly never forgive their new masters
for their arrogant destruction of a brand that rivalled HP's own ... a move that was not an honest battle between equals on the field of war, but was in fact a silent blade slipped into an unsuspecting back in the quiet of night.