Forum: Sadness as the sun sets on the EDS name

The loss of EDS brand will be felt around the world — and locally
  • David Watson (Computerworld New Zealand)
  • 22 October, 2009 10:32

It's often said that IT is about more than just technology and products. "It's about people too" is frequently asserted, and then there's that oft-made "it's about the business as well" comment.

There's also another element that is integral to the industry: brands.

The importance of brands -- and the significance of a brand disappearing -- has been brought home by HP's decision to ditch the long-established EDS brand, following its acquisition of EDS last year, and re-name it "HP Enterprise Services".

The move has attracted plenty of commentary in the blogosphere, and no doubt in the lunch rooms and around the water coolers where former EDS staff now work at HP.

Renai LeMay, writing at ZDNet Australia, says "no IT professional in their right mind could possibly believe that the meaningless title 'HP Enterprise Services' could have more weight in the highly competitive IT services market than the enduring and powerful Electronic Data Systems brand created by the company's founder Ross Perot back in 1962."

HP clearly thinks differently, as analyst Mark Mayo of outsourcing specialist TPI told Computerworld US earlier this month.

"This is a fairly significant bet for HP," he said. "They are continuing the integration to bring EDS into the HP culture but also taking a bet that the HP brand will be better at bringing in business than the legacy EDS name."

Mayo's contention is that while EDS was a leader in outsourcing for several decades after its inception in 1962, by the 1990s things were changing, with the rise of new outsourcers in India and elsewhere.

His assessment: "If you take a step back and look at how the marketplace has changed, the loss of the EDS name is indicative of the whole global play that today's outsourcers must tackle.

"EDS pretty much founded the outsourcing industry and that name is very well known. It's definitely a loss."

Some believe the decision to ditch the EDS brand was designed to bring harmony within HP, to avoid an HP-EDS divide within the organisation.

Whatever the reason, the passing of the EDS name and logo will be felt around the world, not least in New Zealand, where EDS was the biggest employer in the IT sector, employing approximately 2,000 staff when the HP-EDS acquisition was made.

New Zealand was also one of EDS' "Best Shore" sites, country units in which work for clients located outside that country is handled.

One of the criteria for gaining Best Shore status was a strong level of government support, something the government of the day provided in 2003 in the form of a $1.5 million grant, which helped set up EDS' campus at Smales Farm on Auckland's North Shore. EDS says more than 300 jobs were added to its payroll as a result of the Best Shore initiative and more than 20 overseas clients added.

As for how clients and competitors react to the demise of the EDS brand, one comment on LeMay's ZDNet blog noted that the demise of the EDS brand is a good thing for outsourcing competitors of HP, because "HP never did understand services".

For HP New Zealand, there's a bit of irony in that comment, because in 2003 EDS and an HP-Unisys partnership went head-to-head in a highly competitive tender for Fonterra's infrastructure outsourcing business.

The contract went to EDS, but when the EDS name disappears, it'll be HP Enterprise Services that's doing Fonterra's outsourcing.