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Why the HP / EDS Deal Is Making The Street Nervous

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.