No. 10: EDS embraces change

New leadership focuses on NMCI recompete and new markets for growth

EDS Corp.

Top 100 revenue: $2.5 billion

2007 revenue: $22.1 billion

2007 net earnings: $716 million

2006 revenue: $21.3 billion

2006 net earnings: $470 million

Employees: 139,500

http://www.eds.com

Change is good. If you're EDS Corp., you welcome
it, even embrace it.

The Plano, Texas-based company spent the
past year expanding into new markets, bringing
on new clients and even bringing in a
new leader for its government business. And
the coming year is expected to be more of the
same as the government unit sets its sights on
widening its reach in the professional services
area and making acquisitions.

Dennis Stolkey, who was appointed vice
president and general manager of the company's
U.S. government unit in September after
spending 22 years running commercial divisions
in EDS, wants to bring in more information
technology contracts. He said the unit
should even be willing to be a subcontractor
instead of a prime when it's appropriate. The
company will go after the Air Force Uni-
Comm program and the
Transportation Security
Administration's IT infrastructure
program this year.

The company also is
looking at more acquisitions.
Since the purchase
of Saber Corp. in 2007,
which opened the doors to
more state and local work,
the company wants to capitalize
on existing service offerings. EDS will
be looking at identity management, health
care, cybersecurity, secure infrastructure, and
customer relationship management.

But with change comes challenges. And
EDS faces a few as it tries to expand its
already considerable footprint in the federal
market. It ranks No. 10 on this year's
Top 100 list with $2.5 billion in prime
contracting revenue.

Stolkey considers one of the unit's
biggest hurdles to be preparing for
upcoming changes in the White House
and Congress.

"We're mapping out a strategy for
whoever wins," he said.

Stolkey also talks of increasing competition
around the Beltway for government
IT dollars. EDS' strategy is to push its
zero-outage mentality, which means its
technology is never interrupted, and form
more strategic partnerships, especially
with small businesses.

Competition will be front and center
when EDS goes after the crown jewel on
the horizon: the next generation of the
Navy Marine Corps Intranet contract.

The company won the multibilliondollar
contract in
October 2000 and
will recompete for the
business in 2010.

"We intend to do everything
ethically and legally
to win that business,"
Stolkey said. "It's an
important piece of business
for EDS."

The competition for
that work will be intense and rewinning
NMCI will be vital for EDS, analysts said.

"This is going to be one of the biggest deals
coming up in the next five to 10 years in the
federal and Defense Department space," said
Warren Suss, president of Suss Consulting
Inc., a federal IT consulting firm.

The government unit broadened its work in
homeland security, intelligence, state and local
government, and defense in the past year. The
unit also welcomed 21 new clients, such as the
Centers for Disease Control and Prevention,
Pension Benefit Guaranty Corp. and
Environmental Protection Agency.

One of the biggest wins of 2007 was a
$92 million task order from the Centers for
Medicare and Medicaid Services' Enterprise
Data Center, a major modernization project.

"Our strong value propositions are resonating
with our clients," Stolkey said. "We're
focused on trying to achieve zero outages for
our clients all the time, so that is really paying
dividends."

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