Does HP’s Write Down of Its Enterprise Services Business Say Anything about the Condition of the Enterprise IT Software Market in 2012?

We noted with strong interest a press release from Hewlett Packard on Thursday, August 9, Hewlett-Packard’s Whitman Dismantles Hurd-Era Computing Empire (http://www NULL.sfgate NULL.com/business/bloomberg/article/Hewlett-Packard-s-Whitman-Dismantles-Hurd-Era-3774227 NULL.php). What caught our eye was the $8 billion line item produced by a complete write down of HP’s acquisition of EDS Corporation. After all, we are entirely immersed in sales and marketing activities, which we have undertaken on behalf of our clients, which are targeted to enterprise IT software buyers. This acquisition of EDS represented a strong effort, on the part of HP, to add considerable resources to its ongoing efforts as a vendor into these same markets. Therefore, what does HP’s write down of all of EDS have to say about the market for enterprise IT products/services/integrated solutions in 2012?

We do not think that this action says much more than the 2012 market is very challenging, which is really not much news to us. We look to recent public statements from IBM Corporation, Dell, Microsoft and Oracle as equally useful pieces of information. Each of these four vendors (and, most notably, Microsoft and IBM in particular) have reported tangible growth in enterprise IT software sales of products and services. The driver for both of these companies has been identified as an increasing number of sales of software products and services that hasten the production of meaningful analysis based upon business realities for customers. These products, services, and integrated solutions can be loosely categorized under the aegis of business intelligence (BI) solutions. It makes lots of sense that an economically challenging market, like the world of 2012 for many large enterprises, would exhibit a pervasive need for better intelligence about absolutely current business realities. We think that Microsoft, IBM, and Dell (and, likely, Oracle, as well) are particularly well positioned to provide the market with the BI solutions that it requires.

In sum, we think that the EDS write down by HP speaks more to HP’s own internal inability to assimilate a services business like EDS, than to some new crash in the market for enterprise IT products, etc. Therefore, we recommend that innovative technology start ups focused on this market keep at it. It makes sense, nevertheless, to keep at it with products well positioned to solve current market requirements. If your business is not equipped to put together the required information to support a decision as to whether or not it makes sense to proceed with an enterprise IT software offer, please contact IMB Enterprises, Inc. We can certainly provide you with useful information that can provide the basis of a decision as to your future business direction. Please call Ira Michael Blonder at +1 631-673-2929 to further a discussion. You may also email Ira at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

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