EDS Deal: Good or Bad Move for HP's Ann Livermore

Posted by: Spencer Ante on May 15, 2008

Written by Arik Hesseldahl

One of the questions making the rounds today in the wake of Hewlett-Packard’s deal to acquire tech services firm EDS was what this all means for Ann Livermore, the popular HP executive vice president who runs the $38 billion technology solutions group.

One part of the deal announced today involves a big restructuring of HP’s services group. By one estimate, about $5 billion worth of revenue will be leaving Livermore’s portfolio, and landing under Ron Rittenmeyer, EDS’s current CEO who will head up a new business unit that HP CEO Mark Hurd described as “EDS, an HP Company.” Rittenmeyer will report directly to Hurd.

Usually when an executive loses $5 billion worth of their responsibility, that¹s viewed as negative career news. Moreover, from the outside it also looks like the more interesting portion of HP’s services business — the faster growing outsourcing operation — is headed over to EDS, while the less glamorous portion of services, such as maintenance operation and break-and-fix, are staying behind.

So from that aspect a fair question appeared today: What does this restructuring say about Ann Livermore¹s future at HP? A long-time HP employee who joined in 1982, Livermore — profiled by Peter Burrows in the magazine in 2006 — has been considered a contender for the CEO slot more than once, and even lobbied for the job in 1999 before it went to Carly Fiorina.

As she tells it, she¹s staying right where she is. When my colleague Steve Hamm asked her about it earlier today, Livermore described the HP acquisition as “one of the most important strategic moves that HP has ever made.”

She also said she was directly involved in the decision to relocate some of the services business to EDS. As it stands, Livermore says she’ll retain technology services and support, some of consulting and integration services, and data center operations.

Analysts and insiders concurred that the change shouldn¹t be interpreted as a bad thing for Livermore. According to analysts and former HP insiders, there’s no indication that Livermore is in any way out of favor with Hurd.

Rather it’s an attempt to put certain business units in the right hands, as this probably won¹t be the last time moves like this are made. “They are rationalizing where things should go,” says analyst Shannon Cross of Cross Research. “There will probably be some shifting around of assets above and beyond what they announced today.”

So while for now Livermore’s responsibilities appear smaller today, as the integration of EDS progresses at HP, other responsibilities may end up under her jurisdiction.

Reader Comments

kidiafizera

May 26, 2008 3:39 PM

While HP and EDS mend their responsibilities, HP has failed to realized that EDS is the type of Company that doesn't like to be managed by any one else, unless they find themselves in trouble. We've noticed that IBM, CSC and EDS have had several big bids on European markets, but EDS is not well respected in Europe and in India, what is going on with this company???

Venks

May 29, 2008 6:38 AM

I would classify this as a strategic move to challenge IBM in their revenue. Its an interesting move to merge with a services company... Kudos to HP !!!

Jackson2112

October 3, 2008 9:17 AM

Actually.. not even a challenge, HP hit a historic revenue mark for the industry last year.. Over 100 Billion???right??
Mark Hurd is a pretty sharp guy and is almost surgical about everything he does.
Oh and the comment about Europe and India.. is anyone in favor in those regions? HP just needs to continue on in their path and things are looking good.

Martyn Richard Jones

February 6, 2009 2:54 AM

This comment is a bit late but ...

If HP had any sense they would have given EDS to Livermore. EDS is an awkward company, quite frankly I don't know why HP bothered in the first place, but they did, and they really need managing.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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