HP in New Zealand: It’s as if EDS never happened

HP's sales are now back at the level they were before EDS was acquired in 2008.

Hewlett-Packard’s investment in EDS has been repeatedly questioned internationally but in New Zealand, in revenue terms at least, it's now as if the buyout never happened,

HP’s financial statements for the year to 31 October 2013, posted (pdf) this week at the New Zealand Companies Office, reveal sales of $555.5 million, a touch above those reported before the acquisition in 2009 ($538 million) and below 2008’s $600 million.

More importantly, sales are well down on the $815.2 million reported after the inclusion of EDS in HP NZ’s 2010 financial statements.

HP’s local sales then declined consistently from that peak to $735.5 million in 2011, followed by $647.2 million in 2012 before hitting this 2013’s $555.5 million.

EDS was once a powerhouse of corporate and especially government datacentre, outsourcing and other services in New Zealand, with sales pushing $400 million. However, heavy investment in datacentres by rivals such as local company Datacom and global giant IBM and by newer players such as Revera, now owned by Telecom NZ, appear to have taken a toll.

It won’t help that as of last year HP was not included in two key all-of-government ICT supplier panels, one which is mandated for infrastructure as a service and another that agencies can opt into for IT managed services.

The first panel includes Datacom, Telecom’s Revera and IBM while the second includes Datacom, Fujitsu and Telecom’s Gen-i.

HP’s cause would also not have been helped by delays in its local datacentre investment strategy. A $60 million investment in the Waikato was postponed in 2011.

HP’s New Zealand accounts do not break out service revenues as a separate component, so it is not possible to identify exactly where business has been lost.

HP said it does not comment on a country-specific financial results.