HP Completes EDS Buy, Heads for the Clouds

HP said today it has closed its $13.9 billion acquisition of Plano, Texas-based IT services provider EDS, which was first announced in May. The success of the deal will depend on HP’s ability to integrate such a large buy into its already mammoth corporate structure. HP has tackled such a large integration before, via its $18.6 billion merger with Compaq in 2002, but many would argue that that deal was a blundering mess rather than a streamlined corporate integration success story.

Now that the EDS deal is closed, HP can start to work out its nascent cloud strategy. As Om opined earlier, with EDS, HP gets a mature service provider, which means it could offer computing clouds backed by a team experienced with delivering remote services (I’m not saying hosted computing requires the same skill set as cloud computing, but it’s closer). Both HP and IBM have announced cloud computing initiatives in recent months; HP has even created an entire business unit called the Scalability Computing Initiative to sell both cloud hardware and services.

And if the cloud idea doesn’t work out, there’s plenty of business process outsourcing and other consulting firm jargon inside EDS to help HP compete with IBM on the services side. One thing is for sure: Dell now looks like less of a competitor to these guys than ever.