HP reinforces services capability with Comdisco buyout
HP buys Comdisco system support business for $610 million as it bids to grab market share in the global services market. However, other big iron players are also forming alliances to tackle services.
After failing in its bid to acquire PricewaterhouseCoopers at the end of last year, Carly Fiorina, HP’s CEO is making a second attempt to beef up the vendor’s services business.
In a deal worth approximately $610 million, Fiorina agreed to buy the computer services division of Comdisco. Executives from Comdisco simultaneously filed for Chapter 11 bankruptcy protection as HP announced its plans.
Assuming that the deal comes off successfully, HP will get its hands on Comdisco’s 1,300-strong system support business, currently run by John Jackson. Jackson is expected to continue in his role, when the group is run from HP’s headquarters.
The deal comes at a time when market analysts are predicting that the services business should remain largely untouched by widely expected downturn in IT spending.
Even after the proposed $18 billion merger with PwC fell through it was likely HP would make another attempt to build up its services business. With the margins tightening on hardware sales, big iron vendors are expected to focus on services to make up as much as 70-to-80% of deals in the future.
Only earlier this week Sun announced a deal with EDS for a ‘continuum of services.’ The deal should enable Sun and EDS to jointly offer customers a range of ‘on-demand’ IT services.
However, as with the HP/Comdisco deal, it isn’t clear what the specific local implications of the agreement are likely to be.