Greg Enright: Fiorina wins battle, now faces heated IT services war

Assuming that Hewlett-Packard CEO Carly Fiorina puts the finishing touches on her victory over Walter Hewlett and the merger of her firm with Compaq Computer Corp. goes through, what will HP’s world look like when the bloodbath is finally over?

The tussle between Fiorina and Hewlett has been the nastiest battle the IT world has witnessed since Microsoft and the U.S. Department of Justice were firing their catapults at each other last year. The war has been dragging on so long that it has easily become the main focus of attention for observers of both companies. Think HP these days, and you can’t help but associate it with the raging merger battle.

When the dust does settle, however, what will the long-awaited peacetime look like?

Make no mistake, all eyes will be closely focused on just how well the merger turns out for HP. While she may have won a battle against Hewlett, Fiorina still has a war to win, and the pressure will be on. Victory will come in only one form: establishing HP as one of the top three players in the increasingly lucrative IT services game. It could very well happen that only three firms end up controlling 90 per cent of this burgeoning market, especially with customers’ growing reluctance in a shaky financial climate to spend big money on anything IT.

Customers will go with the most trusted names for their services. The fourth-, fifth- and sixth-place providers will have to be content with the 10 or so per cent of the market that is left over. One of those spots is clearly not what HP envisioned themselves occupying when the pitch for Compaq was launched.

It becomes clear just how tall Fiorina’s task is when one looks at how crowded the services space is becoming. A day barely goes by without word of a new services division or portfolio being announced by one tech company or another. And with good reason: a recent study by Framingham, Mass. Research firm International Data Corp. predicts that worldwide spending on IS outsourcing will top US$100 billion by 2005, up from US$56 billion in 2000.

Another research firm, San Jose, Calif.-based Dataquest Inc., presented findings last August that indicated just how fragmented the global services market is: the 400 biggest services firms combined account for less than 50 per cent of the market; more than 15,000 IT services companies existed in the U.S. alone.

The primary competition for HP, however, will come from its neighbours in the top 10 of the Dataquest list – firms such as IBM Corp., EDS Corp., Fujitsu Ltd. and Cap Gemini Ernst & Young LLP. Only by defeating the likes of these foes – and sustaining it – will Fiorina be able to claim a true victory.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now