Could HP turn off IT services business life support?

I recently ran some blog posts giving the predictions for 2013 from of outsourcing industry experts.

One commenter, Robert Morgan, talked about how some of the “suppliers are on life support.”

He said this: “HP and CSC’s problems are well documented. However HP’s cannibalistic tendencies regarding their numerous CEO’s will rear up again and see Meg claiming unemployment benefit before the year is out. CSC has been selling its assets and may survive but not as we know it today. IBM is bereft of new ideas and will lose renewing client in profusion. Regional players like CGI Logica and Atos will benefit especially when the EU starts its new run of legislation (see below). Will there be any logo deaths in 2013? It is possible, but the break-up into saleable smaller entities seems logical and necessary.”

Well HP has said it will dispose of units that don’t hit targets. According to an article on Bloomberg HP will continue to “evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives.” This is what HP said in a filing with the US Securities and Exchange Commission.

I wonder what HP’s targets are for the services business. Last year was not good and it had to write down the value of its EDS acquisition by $8bn.

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I T service companies need to be based on providing excellent levels of service to clients, firm financial footings and a well lead (inspired) and well motivated workforce. Any one of these missing and it will not work. All I read these days of these service companies is staff cutting, freezing salaries and bonuses, disposing of unprofitable units, playing musical chairs with overpaid and incompetent CEOs. HP EDS is one of these companies. IBM, CSC, CGI etc. all seem similar. The accountants have taken control and displaced excellent service with financial jugling. Morale at HP EDS is low as the staff are busy working on CVs looking for other work, doing the minimum necessary to keep their jobs, but certainly not providing innovative and inspirational solutions to business problems. I also dont believe that outsourcing to Indians who work for visas and little money is a solution. We need to get back to rewarding properly and delivering quality solutions.