HP's cash burning a hole in its pocket ... acquires EDS

This acquisition is HP's largest since its $19 billion purchase of Compaq in 2002. Combining market share of both EDS and HP in the computer services segment pegs them at 5.2% versus 7.2% for IBM according to Gartner. Still, they will be much smaller than IBM with its $54 billion in services last year versus $38 billion for HP/EDS. There may be some potential channel conflicts as some of HP's competitors such as Xerox, Dell and Sun sell products through EDS. This hurts Dell the most since now HP will have a much larger channel to sell its servers and desktops. Plans are to keep the EDS headquarters in Plano, Texas. That's great because now HP can use the cool executive briefing center that Ross Perot disliked so much known as the "God Pod." It's located in that center section spanning the two buildings. It has a cutout in the floor that reminds you of the Ghost Bar on the 55th floor of the Palms Casino in Las Vegas. Don't stomp on it too hard!