Why 1984 won't be like 1984 for HP/EDS

Electronic Data Systems is giving the process a go again, this time being acquired by HP. I lived through the General Motors acquisition of EDS back in the 80's as a Systems Engineer at EDS. The EDS back then was a much different EDS than exists today. Most notability, EDS was still Ross Perot's company through and through back then. When GM bought EDS, everyone at EDS from Ross Perot on down, believed that EDS was buying GM - at least as running IT goes. We were there to "fix" GM and show them how it was supposed to be done. GM was our largest customer, and Ross believed he was on a mission to show GM how the rest of the company should be run like he ran EDS. What bravado and arrogance we had back then. Those were heady days and Ross never let either company forget it.

Immediately after GM bought EDS, our executives were on planes commuting between Dallas and the Detroit area. I can remember getting on airplanes and being pretty confident that everyone else on the plane headed to Detroit worked for EDS too. Some commuted weekly for years and many other employees moved up to Michigan.

GM IT employees went through the same assimilation process every other new "facilities management" customer went through. The story went; Today EDS is taking over IT at [insert corporate name]. Everyone here will be interviewed today to determine if they will have a job as an EDS employee, doing the same or different work you did yesterday, or if you will be let go. The SE Manager has a name list that will tell you what time your interview will be. Good luck with your interview. The only people who were in more shock than everyone else was anyone who had been through another "EDS transition" at a previous job, i.e. here we go again. The same thing happened at GM, just like every other account, but because of the size the process took longer.

The ups and downs of EDS since have been well reported and documented. No need to repeat that here. Since those days, IBM is now dominant and a major competitor to EDS. An interesting side note - One of my strategic projects back then was a project led by Bob Hagen, looking at how IBMs Federal Division was becoming the model for IBM to move into the facilities management business and go from EDS's biggest supplier to their biggest competitor. Few believed us then, especially those who had the IBM worm too tightly wrapped around their brains, but most of the corporate leaders saw this was becoming a major threat to EDS' business.

How true those early predictions became, to the point that competing with IBM is the major reason for HP's acquisition of EDS today. But this transition won't go like EDS's acquisition by (or of?) GM. HP wants EDS to bring in revenues by servicing other customers, not "fixing HP". Ross is gone, and right hand man Mort Meyerson is gone too. This acquisition is about bringing in new revenues and helping HP compete against IBM.

Will HP be able to managed the EDS acquisition better than GM, not getting overrun by EDS' bravado? Well, it's been a long time since I was at EDS but I've got to believe that Perot's "ready, fire, aim" approach is long gone. EDS has brought in waves of new management and leadership talent which has likely calmed the head strong culture and management style EDS once had. EDS should be a much more manageable company for HP. And HP knows a heck of a lot more about what EDS does, giving them a leg up in the process.

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