If Hewlett-Packard Buys EDS, Then MSPs Should Celebrate

If Hewlett-Packard buys Electronic Data Systems, as The Wall Street Journal is speculating, it could mean good news for managed service providers.

Think about it for a minute: Dell has already moved into the managed services market. And Microsoft is sizing up the MSP space. Likewise, Hewlett-Packard could be developing software or buying platform providers to better manage the company’s own servers and desktops — especially in small and midsize businesses.

But an EDS buyout could distract HP for years to come, leaving MSPs plenty of opportunity to manage small and midsize businesses that deploy HP gear.

Missing the Boat

Ironically, HP could have been in a very strong position to dominate or at least enhance the MSP market. HP OpenView remains a core platform for managing and running large enterprise systems and infrastructure. But therein lies the rub: OpenView itself has proven too complex for smaller and midsize businesses to deploy. And HP hasn’t done much in the managed services space — at least not yet.

There are hints that HP is prepping a VAR-centric managed services strategy. The company recently joined MSP Partners, a vendor-driven organization aimed at promoting and educating users and VARs about managed services.

HP has also done a reasonably solid job building its ProCurve networking business, and its printer business remains a cash cow, despite heightened competition from Oki Data, Xerox and others.

The Perfect Storm

When you lump HP’s desktop, server, printer and networking businesses together, it’s easy to see why HP’s own partners are eager to embrace managed services. Generating recurring service revenue for all of that equipment would be a dream come true for most HP partners.

Still, it appears that HP is willing — at least, for now — to partner in the MSP space rather than buying up platform providers. After all, the PC giant will have its hands full managing the EDS buyout — a proposed business combo that The Wall Street Journal’s sources seem to love.

Of course, HP could still make a run at the managed services market. Surely, the company is watching Dell’s MSP moves with Silverback and Everdream very closely.