HP “Hires” 140,000 to Get Rid of Your Job

August 27th, 2008 by Julia Lim

HP completed its $13.25 billion acquisition of EDS today.

Can HP-EDS put its money where its mouth is? EDS profit margin, pre-acquisition, was under 6%. The former EDS CEO, now heading the combined outsourcing unit, expects to leverage HP automation tools to cut costs and improve that margin.

But Rod Bourgeois, an analyst at Sanford Bernstein says, “It’s not like HP has automation tools that weren’t at EDS’s disposal before.”

But this brings up a good point. EDS and 140,000 new bodies notwithstanding, HP seems to be positioning itself to do a big automation push in the marketplace.

Of course this makes sense – we’ve talked before about what a critical role automation is going to have in managing the rapidly evolving “dynamic” data center. Technologies like virtualization and cloud computing needs are pushing out the limits of real-time resources management in the data center; management tools must perform faster, integrate with more solutions across the spectrum of IT infrastructure and be smart enough to do much of this on their own.

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August 27th, 2008

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