Microsoft is reported, by the FT.com, to have taken the most direct approach of a number of technology companies interested in forging strategic relationships with EDS, the world’s second largest services company after IBM Global Services.
The article, which also named Hewlett Packard Co as a potential strategic partner, said the technology companies are interested in either large minority investments or even outright acquisition of EDS.
News of Microsoft’s approach comes days after EDS chief executive Dick Brown stepped down and the company brought in former CBS Corp chairman and chief executive Michael Jordan as chairman.
Jordan made his mark by turning around Westinghouse House Electric Corp, and transforming it into CBS Corp, which was subsequently taken over by media giant Viacom.
Along with Jordan’s appointment, EDS also reinstated the position of president and COO, which will be taken on by Jeffrey Heller, former vice chairman. Heller, who has come out of retirement, held the president and COO role at EDS from 1996 to 2000.
EDS this week refused to comment on what it called rumors and speculation. A company spokesperson said it was also too soon to comment on the management’s future plans. It’s their first day, a spokesperson said. Microsoft also refused to comment.
A tight relationship with EDS could help push Microsoft’s products among a blue-chip crowd. Microsoft chief executive Steve Ballmer has spoken in the past of needing to get more skin in the game, providing more Microsoft-skilled consultants and support staff in the field to design, install and service Windows installations for customers.
Garter Group managing vice president Bob Goodwin said a deal with EDS would help Microsoft win high-level management support among EDS’ customer base. EDS has big clients and provides an entry to the board in large companies, he said.
He said a potential acqusition would likely be unlikely, meeting resistence from both Jordan and the EDS management. [Acqusition] is not the first choice that Jordan has. There’s a lot of pride down there about what a good job they’ve been doing. There’s a survival mentality, Goodwin said.
He also ruled out acqusition by HP, which is still digesting Compaq Computer Corp.
Source: Computerwire