International Business Machines Corp. (IBM)

All Comments on IBM

  • commenter
    mnot
    May 14 09:19 PM
    My Website
    Who's on First, Services Oriented Architecture or Web Oriented Architecture? [view article]
    I think you hit the nail on the head when you call SOA an offshoot of EAI, and that's what's going to drive its adoption -- and limit it.

    There's nothing fundamentally better / more capable about SOA over WOA, but if you've got (as you say) fifteen different back-end systems to integrate, SOA is more attractive because it was built from the ground up to wrap them; it doesn't impose many limits at all.

    WOA, on the other hand, is usually ill-suited for that task, unless you're willing to go to a *lot* of effort. OTOH it's much simpler and more powerful if you're building fresh -- hence the focus of the startups on it.

    I tend to think that in the long run, SOA's market is pretty limited, but in the short to medium term, it's lucrative. WOA is a better long-term bet, but there's less money in it... for now.     Reply
  • commenter
    deaverb
    May 14 03:48 PM
    My Website
    HP’s Acquisition of EDS Makes Sense [view article]
    The article underscores the long term strategic advantages of this merger that so many have missed. EDS is a top brand in consulting, especially "wring out the costs by eliminating the complexity and 'your' people, turning them over to us (whew)."

    As with a re-energized Avis with Robert Townsend many years ago, that ironically benefited Hertz as much or more than Avis, now IT buyers have two strong shops to choose between. If one doesn't work, you have Avis try harder over at HP, or #1 at IBM.

    Any CEO of a major Fortune 500 company will take a sigh of relief knowing that the "other" guy is a safe fall back position. IBM has hardware; HP has hardware. Sweet deal for everyone.

    Smart move.     Reply
  • commenter
    europeaninve
    st
    May 14 01:24 PM
    My Website
    HP and EDS: A Convenient Marriage [view article]
    bingo Reply
  • commenter
    chowderhead
    May 14 12:53 PM
    HP Snaps Up EDS for a Bargain [view article]
    The price IBM paid for PwC was a 'deal'. EDS is not when its approximately 50% of revenue and gross margins that are poor.

    First the quality of the buy. We have to remember that EDS is not a tier-1 consulting company. They are frequently left out of many of the Global 1000's RFPs for strategic transformation projects. That said, Deliotte or Accenture would have been a better buy if HP could afford it and had a strong services strategy.

    Next, cost controls. I am sure you can 'cut' heads and costs but I am also sure that Ron Rittenmeyer has been slashing for some years to meet his financial goals and thus stock price. So, I would say that cuts will be done, but limited to pruning and effectiveness unless EDS dips into short term thinking and slashes away their future.

    Lastly, I question the deal's longevity to HP's bottom line. EDS doesn't have the strength and breadth to compete with IBM and the tier-1 consulting companies. EDS merged with an even poorer HP Services team move the needle anywhere other than increase its size.

    You can pretty the monkey and balance sheets up for the next 2-3 yrs through cuts and usage of HP vs. Sun hardware, but it remains to be seen how much of a consulting force this marrige will make in the market.     Reply
  • commenter
    buzzly
    May 14 10:25 AM
    i2 Technologies' Turnaround: Part I [view article]
    Amen to what getiright said.

    Reply
  • commenter
    count_zero
    May 14 10:16 AM
    HP Snaps Up EDS for a Bargain [view article]
    I was part of the IBM HQ-area Services organization for some (too many) years. Anyone who can provide true value for the technology services dollar/euro can take a slice from IBM's pie as they certainly cannot do it, From an inside viewpoint it is an absurdly managed free-for-all of commissioned sales persons still hanging to the skirts of the big iron. Go for it Mr. Hurd. Reply
  • commenter
    buzzly
    May 14 09:58 AM
    HP Snaps Up EDS for a Bargain [view article]
    "A $23 billion revenue company pruchased at about $13 billion is quite a bargain, if not a steal."

    Using this logic, banks must worth a lot of money. The key things here are growth and profit margins (as posted by User 193142).

    Hurd brought EDS mainly to provide scale for its infrastructure outsourcing business which has single-digital margin. So buying EDS is just step 1, step 2 is to cut costs in order to make this worthwhile.


    Reply
  • commenter
    mltxus
    May 14 09:39 AM
    HP Snaps Up EDS for a Bargain [view article]
    "A $23 billion revenue company pruchased at about $13 billion is quite a bargain, if not a steal."

    Are you serious?? Concentrate on the growth potential and profit margins of the EDS business model and you might change your opinion a bit.     Reply
  • commenter
    p. smith
    May 14 09:35 AM
    Why the HP / EDS Deal Is Making The Street Nervous [view article]
    lots of heavy lifting and margin compression, too much uncertainty for many years to come. Reply
  • commenter
    Ali K
    May 14 09:12 AM
    My Website
    Why the HP / EDS Deal Is Making The Street Nervous [view article]
    HP historically is able to integrate new companies extremely well. The caveat is that the positive record is generally for many smaller companies - and the Compaq acquisition (much larger than others) was a total nightmare for HP. THe questions are whether they can integrate well, and whether they can manage EDS to better performance. Overall, as a long term play they really can't lose - either EDS/HP has a smooth transition and HP ends up being near dominant over IBM - or HP still maintains such share by using EDS resources and relationships after dismantling the company. Long term - strong buy. Reply
  • commenter
    User 49180
    May 14 07:58 AM
    HP’s Acquisition of EDS Makes Sense [view article]
    The acquisition of EDS may prove valuable to HPQ in the long run but could lead to p/e compression and a lower than otherwise HPQ stock price in the near term. HPQ's Gross margin was just under 25% last year compared to just under 42.5% for IBM which has shed lower margin business segments like PC's over the last several years. EDS' gross margin was just under 14% last year and adding another relatively low margin book of business to HPQ's big PC business should keep HPQ Gross Margin sub 25%.

    In addition, many big EDS customers use IBM hardware and may want to transition to IBM's new Power6 equipment. The acquisition may provide marketing opportunities for IBM to characterize HPQ/EDS as a "middleman".     Reply
  • commenter
    xz1
    May 14 01:14 AM
    Why the HP / EDS Deal Is Making The Street Nervous [view article]
    i dont think mark hurd had a choice, his magic was cost control and optimize the operation. he pretty much squeeze everything he can out of the old hpq and need a new battlefield to replicate the trick. EDS is a good target but I'd rather see him do a stock deal than cash. Now hpq -3B on their balance sheet. though long term it most likely work out well, the short term integration and financial risk is just too high, i sold out all my position and will stay away from the stock. There are just too many cheap options available on this market today. Reply
  • commenter
    wtmerge
    May 13 11:30 PM
    My Website
    HP Teams Up with EDS to Challenge IBM in Business Transformation [view article]
    Info on the acquisition of EDS
    www.willtheymerge.com/...     Reply
  • commenter
    SA Editor
    Eli Hoffmann
    May 13 02:08 PM
    Wall Street Breakfast: Must-Know News [view article]
    Hi User 154243 -- we actually covered that yesterday. Thanks.

    seekingalpha.com/artic...     Reply
  • commenter
    Madhusudan
    Rao
    May 13 01:29 PM
    Which IT Outsourcing Stock is the Best? [view article]
    Hi,

    I was referring to the Software engineers' (resources salaries) and not average salaries across the company. My apologies for the confusion. Please note that this also may have increased to about 2.5 to 3 lakh p.a (starting salaries).     Reply
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