Hewlett-Packard’s 2008 acquisition of EDS aimed to make the company more like IBM. Although it catapulted HP into second place behind IBM in the technology services market, the deal didn’t work as planned.
The business unit, now called HP Enterprise Services, has been in turmoil since formation. Instead of boosting its parent it became a drag on the company. Last year HP wrote-off US$8 billion against the US$14 billion it paid for EDS.
HP Enterprise Services hasn’t fared any better in New Zealand as Tom Pullar-Strecker reports in HP New Zealand annual loss widens to $92.5 million. He says the enterprise services unit enjoyed a strong position in the local government and corporate market but has since lost major clients.
The unit’s failing fortunes were obvious to residents on Auckland’s North Shore who over the years could watch the lights progressively switch off at the company’s Smales Farm building and the for lease signs go up.