What's in a name? HP is about to find out
Timing is right, yet challenges remain with re-branding
- By Nick Wakeman
- Sep 23, 2009
Hewlett-Packard has dropped the 47-year-old brand name, EDS, and has renamed the business HP Enterprise Services.
The company said the name change “marks the next major step in a year-long integration of EDS into HP.” HP closed its acquisition of EDS in August 2008. For the past year, the EDS name has included the tag, "an HP Company."
In the government market, the name change has pluses and minuses, marketing experts said.
The HP name is more recognizable as a product company, while EDS is pure services. Those two lines of business can have very distinct cultures and can cause conflicts when being brought together, the experts said.
“Changing the brand forces a one-company, one-culture approach,” said Larry Rosenfeld, chief executive officer of Sage Communications, a public relationship and marketing firm. “[But] it has been one year since the acquisition, and therefore the timing is right.”
HP needs to communicate the strategy behind the name change to government customers and to systems integrators and vendors. If integrators feel HP is favoring its own systems integration capabilities, they will stop bidding HP products, said Stephen O’Keeffe, founder and principal of O’Keeffe and Co., a public relations and marketing firm.
“This is no easy undertaking, and if HP gets it wrong, the EDS integration will actually damage its overall business,” O’Keeffe said.
“A systems integrator is supposed to be product agnostic. There could be problems if the perception is that HP Enterprise Services leads and builds their solutions around HP products,” said Scott Lewis, president of PS Partnerships, a consulting company that works with companies in the government market.
Other systems integrators could use that perception to their advantage. “It gives them something to sell against,” Lewis said.
Because of the strong connection to HP as a product company, the rebranding is starting close to ground zero, said Mark Amtower, founder of Amtower and Co., a marketing consultancy.
Rebranding under almost any circumstance is a long process, Amtower said. The payoff is having everything come under one name, similar to how IBM has integrated its acquisitions, he added.
HP had no choice but to rebrand. “You cannot realize synergy without bringing things together,” O’Keeffe said.
“The challenge is to ensure that the virtuous attributes of the acquired company transition to the acquiring company,” he said.
The rebranding also can help create a new combined company culture and build internal trust across the different parts of the company, Rosenfeld said.
“This in turn enables more business and cross-selling opportunities,” he said. “Bottom line: the rebranding of EDS to HP Enterprise Services should – if done correctly – increase shareholder value.”
The name change also comes in the same week that HP's rival, Dell Inc., announced it was acquiring Perot Systems to build its services and systems integration business.
Both moves emphasize the importance of services in information technology market. "Services are the high-margin business," O'Keeffe said. "Dell will be watching HP’s moves carefully to try to establish best practices. It’s always nice to follow a big brother – you have the luxury of watching his mistakes and trying to be smarter."