HP’s decision to acquire EDS cannot be faulted when measured against all the standard metrics for doing a mega-deal in the traditional technology world. It gives both companies greater scale and access to more corporate customers without a lot of overlap.

The problem is that we are in the midst of a fundamental change in the way customers acquire technology and the way they perceive their vendors. The HP/EDS combination doesn’t fit this new world order.

There is no question that EDS strengthens HP’s hand when it comes to building and managing complex enterprise data centers. The acquisition also gives EDS ready access to HP’s installed base of customers.

Wherever there are big systems integration and ongoing management projects to be won, HP/EDS will be in a better position to compete with IBM and the off-shoring companies than they were a day ago … Read More »

It is always gratifying to have the major research firms affirm my perspectives and THINKstrategies’ predictions.

Recently, Gartner predicted that the global outsourcing market will grow 8.1 percent in 2008, and that this growth would not be in the form of traditional IT and business process outsourcing (BPO) agreements, but fueled instead by growing the acceptance of Software-as-a-Service (SaaS) and other utility computing services offerings by companies of all sizes.

Let’s have some fun and do a side-by-side comparison:

According to Gartner, “publicly reported IT outsourcing (ITO) and business process outsourcing (BPO) contract values decreased overall by 50 percent in 2007.”In January 2002, I wrote in a NetworkWorld commentary that the traditional outsourcing model was dying. Even at that time, the size and duration of these deals was shrinking because their rate of success was abysmal.

As I’ve been stating for many years, companies … Read More »

I had the privilege this week of participating in an interesting webinar sponsored by Makana Solutions regarding the sales implications of Software-as-a-Service (SaaS) and other subscription services.

Tom Wilson, of the Wilson Group; Makana’s founder, chairman, and CEO Liz Cobb; and I discussed how the sales skills and processes differ in the on-demand services world from the traditional packaged product environment. Specifically, on-demand services come at a lower price-point which necessitates higher volume sales to be successful. This requires a transaction oriented sales process and telesales skills, rather than the long salescycles and highly personalized approach of traditional legacy software sales. Therefore, restructuring the sales process and retraining or restaffing the sales team is critical to transitioning to the SaaS and subscription service model.

Similarly, the support function also changes in the on-demand world. Rather than rely on technical support to react … Read More »