Will HP sell its services business?

Suitors come a callin'


Several suitors have approached Hewlett-Packard Co. about buying the services business it bought when it took over EDS in 2008, the Wall Street Journal is reporting.

The interest in HP Enterprise Services apparently is part of some overturns from buyers wanting to purchase Autonomy, the software company HP bought last year that is now accused of accounting improprieties in 2011.

The big question is whether HP CEO Meg Whitman is interested in selling either business. Sources told the Wall Street Journal that she is not.

Several factors have sparked interest in breaking up HP. One is that the company’s stock price is down by 64 percent over the last two years.

Interest from buyers got another boost from HP’s form 10-K filed with the Securities and Exchange Commission in December, a source told Washington Technology. In the risk factors section, HP said, “We also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives.”

A third spark, the source said, has come from reports that Dell Inc. might consider a private equity buyout as a part of a plan to turn its business around.

While Autonomy is a recent acquisition of HP’s and theoretically should be easy to extract from the company, the old EDS business is deeply integrated and would be challenging to disentangle.

An HP spokesman declined comment saying the company does not respond to speculation.


About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

Reader Comments

Sat, Jan 26, 2013

I have never experienced a cultural clash as drastic as HP ES and big HP....OEM Vendor Reps and Hourly Consultants are inherently opposites...Sell them off and lease back the Cloud Centers on an as need basis...

Mon, Jan 21, 2013 Jamal No. VA

Do u think that SAIC or BAH/Carlyle is a suitor? How successful would they be running this caracass of a business?

Wed, Jan 16, 2013 HP Insider

The EDS Services business would not be 'challenging to distangle'. The main reason the former EDS needs to be sold is that HP Leadership has totally ignored Services since the original aquisition. Almost none of the original EDS support systems and processes were ever integrated into the HP enterprise. Doing that of course, would have required forward thinking - and money. Extraction isn't the problem. Figuring out the overstaffed EDS puzzle resulting from total ignorance by HP Mgmt is the real challenge here.

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