Yesterday’s announcement by HP that it is cutting 9000 workers and hiring another 6000 as part of a $1 billion multi-year effort to redesign its data center operations and automate its enterprise services is the latest indication of the traumatic impact which today’s cloud computing phenomenon is having on the tech industry.

HP readily admitted in its announcement that its goal is to,

“…Consolidate Enterprise Services’ commercial data centers, management platforms, networks, tools and applications to create a more scalable, modernized and automated IT infrastructure that will better serve its clients’ needs.”

Although the company didn’t specify where its cuts would take place, I suspect that the bulk of the downsizing effort within the Enterprise Services division will involve offloading the legacy data center facilities and staff which came from the EDS acquisition.

My sources within the company have confirmed my original concerns about the acquisition … Read More »

Dell’s acquisition of Perot Systems clearly demonstrates that Dell is in the midst of abandoning its historic advantage as the most efficient direct marketing company in the tech industry, in favor of following the increasingly failed outsourcing models of its bigger hardware rivals.

By buying Perot Systems, Dell is following in the footsteps of HP’s acquisition of EDS in an attempt to match the IT outsourcing (ITO) and services capabilities of IBM.

The only problem is that an increasing number of large-scale enterprises have become disillusioned with tradition ITO because these asset transfer deals have generally failed to achieve their business objectives. Even traditional IT consulting engagements frustrate many IT and business decision-makers because they tend to be too long and expensive.

Blending a labor-intensive business, like Perot Systems, with a product-centric company, like Dell, is also a formula for trouble. These are two very different … Read More »