This was something I wrote for fun a few months back when HP announced that it had bought over EDS, sending a rude shock to Shell as it outsources its IT infrastructure. This is purely fictional and any comments or reference to any individual is purely made up.
HP Strikes Back
13 May, Cyberjaya – In a striking turn of events, just 2 months before Shell sells off one of their larger IT departments to EDS, HP acquired Electronic Data Systems for $13.9 billion.
HP CEO says that the acquisition of EDS will pave way for HP to have a stronger foothold in the IT services business.
HP generated $16 billion dollars in revenue last year from IT consulting compared to IBM’s $48 billion and EDS’s $38 billion.
“HP will definitely gain a stronger presence in the global IT services and outsourcing industry” said Iqbal Abd Ghaffar, CEO of IAG Corp. “Why build from scratch when you can buy? Its better to leverage on EDS’s experience and global presence to compete with IBM.”
Though many analysts see this take-over as positive, others are not too keen especially the workers union.
The National Organization for Information and Systems Employees (NOISE) in Malaysia questions about the welfare of employees of both HP and EDS.
“What now? Shell has sold their end computing and support business to EDS and now EDS is bought over by HP. It’s caused enough detrimental stress to employees of Shell to cope and adjust to moving to EDS and now to HP. Now there’s an even bigger change and confusion. What guarantees will EDS, HP and Shell give to the affected employees?”
When asked for comment, Shell IT CIO, Alan Matula says “we are engaging with our counterparts at EDS. Clearly we are shocked with the latest developments”.
In Sept 2006 Shell announced that they are conducting a sourcing study for their IT arm. In December last year, the successful vendors were announced, 12 months ahead of schedule. EDS beat rivals HP and IBM to take over Shell’s End user computing and call center departments.
Could the failure to successfully win the outsourcing contract spurred HP to buy over EDS? To think, what is $13.9 bln compared to an immediate yearly earnings of $30 bln and a contract worth some $1 bln a year from Shell.
The biggest question now remains, will Shell proceed with outsourcing its end user computing and call center to EDS where the contract is estimated to be worth some $5 bln over the next 5 years?