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Mar 8 2011   6:13PM GMT

HP services take it on the chin

badarrow Barbara Darrow Profile: badarrow

Sometimes you wonder if Hewlett-Packard can buy itself a break. Checkout this Wall Street Journal  headline: IBM shows HP how to serve clients.

Ouch.

HP services fared poorly in the fourth quarter compared to IBM and Accenture, according to this “Heard on the Street” entry.  Revenue for HP’s services arm (including what’s left of the old  EDS) fell 2% year-over-year for that period. Salt in the wound, IBM’s services revenue and that of Accenture both rose 12% in that same period.

HP partners might laud this if they think  they can make up for HP’s own services deficit.  But the problem is that HP gambled big on serivces when it bought EDS three years ago for nearly $13 billion. Since then, execution has lagged. It also seems to indicate that the cuts and tweaking HP initiated last June to get itself down to fighting weight haven’t done the trick.

This tidbit also makes one wonder whether Oracle’s stated plan to leave services to big partners is a risk or a plus for that software giant. Oracle does field a consulting arm but it is minute compared to the IBM and HP services groups.

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