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EDS sees opportunity in downturn

EDS sees opportunity in downturn

In a rare press briefing today, EDS touted the progress and benefits of its integration with HP and its prospects in the ANZ region, saying the company's performance is to some degree "counter-cyclical".

David Caspari, EDS's managing director for Australia and New Zealand, says EDS is making good progress against its plans and has had a very strong year in ANZ. He says the company has had its third consecutive year of strong profit and positive cashflow.

"Equally exciting is the pipeline of opportunities for 2009," he says. "The environment is very good for EDS. There isn't a CEO or CFO not asking their CIO to reduce costs, take a look at the balance sheet and drive performance."

Caspari says the integration of HP and EDS is progressing quickly, but he would not be drawn to reveal any significant new detail on job losses or on HP's announced global 5% wage cut for staff. Instead, he reiterated that redundancies would be in line with the globally announced 7.5% and stated that the 5% wage cut would be voluntary in ANZ due to local legal restrictions.

He says consultations with staff are ongoing and confirmed he would be taking such a cut himself.

Caspari's visit to New Zealand coincides with EDS pushing into the midmarket, riding on the back of HP's strength in that space. EDS has launched "prepackaged" solutions to address the market as part of a product called, perhaps tempting fate considering its wage-cut plan, "Strike".

He says these will drive EDS's strengths in outsourcing, business process outsourcing and application outsourcing into the mid-market.

EDS is being integrated into HP's Technology Solutions Group, headed by Ann Livermore globally. Caspari says "legal closure", the complete integration of EDS with HP, is expected in ANZ by the end of the year.

Customers see EDS as the "safest hands in the industry", Caspari says, but they now see the additional value of what HP can bring; especially in areas such as data centre research and development, virtualisation and enterprise software. EDS is integrating that into its offerings, he says.

Almost without exception new contract wins to be announced this year have happened because the two companies came together, he says.

EDS's New Zealand country manager, Alfonso Gomez, says local integration with HP has been fairly seamless, as the companies' product sets and customers were complementary. The company's main service offerings for 2009 and beyond will be infrastructure outsourcing; applications outsourcing; business process outsourcing. “We will continue to invest in the three of them,” says Gomez.

EDS has recently launched a mid-market, managed services offering aimed particularly at smaller countries, says Gomez. “We’re pushing forward with that. In a small market such as New Zealand, that’s a very attractive position for us to be in. We’re now tapping into smaller sized operations with a lot of success.”

In spite of the ongoing integration with HP, says Gomez, EDS has not changed its partnership alliance significantly, he says.

EDS continues to work with best of breed partners under its Agility Alliance to deliver services on the EDS Agile Enterprise Platform. These partners include Cisco, EMC, Microsoft, Oracle, SAP, Sun and Xerox. “The commitment of our Agility partners is for a number of years. We signed those alliance partnerships with joint go-to-market objectives, joint research and development objectives, joint collaboration efforts and teaming efforts,” says Gomez. “So even though the acquisition obviously brings much closer collaboration with HP, which also was one of the alliance, the Agility Alliance remains, and those long-term contracts continue to be of use.”

Gomez also indicated there are opportunities for EDS to service overseas clients from New Zealand, citing the exchange rate as one factor creating a favourable local climate to deliver outsourced services internationally.


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