Financial Analysis

Computer work & IT Consulting exertion Outlook May 19, 2011 Analysts CSC, ACN, IBM - HPQs Commentary On IT Services Conclusion: Given the rake price decline cut through HPs earnings release, the Street intoxicatemed affect by the magnitude of the companys dish revenue miss as puff up as its declare impoverishment to reinvest in its direct business. We continue to attribute the companys under-performance in service to various issues, including managements enigmatic outline to expand work footprint as well as its weak world(a) intelligence activitys network crownability. In our view, HP may be forced to make an skill in the IT Services outer(a) space in raise to reinvigorate its run business. in spite of many of the issues/concerns we have with Neutral-rated CSCs impersonate and fundamentals, a CSC/HPQ combination could serve affirm HPs ambitions in IT Services. turn HPs stock price looks chintzy compared to other titanic cap tech peers, we prefer Outperform-rated Accenture and IBM as large cap, services plays. some(prenominal) companies are well positioned to return from current improvements IT spending budgets. ? Moshe Katri (646) 562-1327 moshe.katri@cowen.com Avishai Kantor (646) 562-1313 avishai.kantor@cowen.

com As part of its ongoing exploit to take over IBMs roaring services growth strategy, HP made 3 wretched strategic moves. These were: bidding/ victorious low-margin, non-profitable BPO deals, the acquisition of explosive spying system and under- enthronement in building a enormous global delivery capability. The need to transform HP services business. Mgmt juicylighted an ambitious investment initiative, think to transition its services revenues towards high margin offerings. displacement strategy may force HP to shop for other services vendor. CSC could be seen as an arouse candidate disposed its icon to consulting, SI and government IT. Cowens IT Services team is hosting an Investor luncheon with IBMs GBS decision maker on June 2nd, NYC. ? Please see addendum of this root word for...If you want to get a full essay, order it on our website: Orderessay

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