May 13th, 2008
Will EDS deal make HP Microsoft’s IBM?
With the completion of its deal to buy EDS for $13.9 billion, Hewlett-Packard is about to become just as key to Microsoft’s fate as IBM is to the fate of open source.
How will Microsoft react?
While Sun, Red Hat and a host of start-ups draw most of the open source attention, it’s unlikely the movement would be where it is without the support of IBM, whose service businesses make great use of Linux.
IBM is not only a key supporter of many open source projects, like Eclipse, but its success proves you can both make money in open source and run it in scaled installations.
Open source advocates don’t acknowledge the importance of IBM because IBM wears its power lightly.
Just as Mark Hurd of Hewlett-Packard (above), who has done such a great job rescuing his company from the stupidity that was Carly Fiorina, wears his power lightly.
Since its (now) successful absorption of Compaq, HP under Hurd is becoming just as important to Microsoft as IBM is to open source. With EDS, a major user of Windows in its own service operations, this becomes clearer.
HP now has the market power to push back against Windows Vista, selling XP after Microsoft said it wanted to stop. Want to guess how many Microsoftees are now working on a glitch affecting HP machines on AMD chips? I’m guessing that’s a top priority in Redmond right now.
EDS was already becoming a key Microsoft customer, with deals like its $1 billion desktop support agreement for Royal Dutch Shell, which Larry Dignan described earlier this month.
In the past Microsoft prospered because no one customer could push it around. Now one customer can. When Mark Hurd says jump, Steve Ballmer must now ask “how high?”
When IBM says jump, I’m certain most open source businesses ask the same question — how high?
One more point worth considering. Microsoft is still worth twice as much as HP. Ballmer & Co. have been seeking a new vision for years, and Mark Hurd seems to have one.
It wouldn’t be the first time an old NCR man rolled-up the business computing space.
Just something to THINK about.
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. See his full profile and disclosure of his industry affiliations.
| 05/13/08
