HP's Acquisition of EDS Makes Sense

5/14 - "Clearly, the intent of the deal is to challenge IBM’s supremacy in IT services. IBM claims the largest share of the international IT services market with 7.2%, according to Gartner Inc. EDS is second with a 3% share, and HP is fifth with 2.3%. As with any large scale merger there will be organizational difficulties and differences of corporate culture, but this merger should provide much upside for HP."

"The IT service group is obviously a focal point for HP CEO Mark Hurd’s growth strategy and many analysts foresee the industry as a whole growing at a steady 8% clip of the next 5 years. Mr. Hurd wants to claim more of that growth for HP as opposed to industry leader and rival IBM. The other reason HP is eager to grow its IT services group is because—unlike their Personal Computer business segment—the IT service group is very resistant to business cycle flu...