Has HP services had its defining moment with General Motors extension?

Could the $2bn IT services deal between General Motors and HP Enterprise Services be a sign that HP’s services model will work.

Although not always directly, the two companies have a long history.

EDS was once General Motors’ IT department until it was spun out in the 1990s to look for more customers. General Motors remained a customer. Then HP bought EDS in 2008.

A source told me that General Motors did go to the market for alternative suppliers. But it has retained the bulk of the HP services.

HP has been criticised for changing EDS, which was seen as a compamy that defined IT outsourcing The fact that General Motors is sticking with it could be a turning point.

Robert Morgan at consultancy Burnt-Oak Partners says this is the most significant deal since HP acquired EDS. He also says it affirms that the supplier under the leadership of Mark Hurd has improved.

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