EDS: A Return to Glory?

Opinion: Rebuilding is key for EDS, as well as Oracle's hopes for Fusion.

Rebuilding story No. 1: Electronic Data Systems CEO Michael Jordan has rehung the portrait of founder Ross Perot outside his offices in EDS Plano, Texas, headquarters. Perot has been absent from the company since 1984, as has the spirit of excellence that Perot embodied, Jordan reasoned, and his presence may inspire EDS to a return to glory. After 1996, when EDS was spun out of General Motors, EDS slid into mediocrity and its finances into junk status. As eWEEK Executive Editor Stan Gibson writes inside this week, EDS didnt hit bottom until it signed its infamous outsourcing pact for the Navy Marine Corps Intranet project in 2000. EDS is still losing money on NMCI but now hopes to recover much of that.

The lessons EDS has learned since: Try not to be all things to all customers, and be willing to accept smaller deals instead of only shooting for the largest ones. That said, EDS still is trying to be flexible, within reason, and wants to take on IBM Global Services when the opportunity presents itself, as it did when EDS beat out IGS for a $500 million deal with Royal Ahold last year. More proof that EDS is turning it around: The company persuaded representatives from the NMCI to help pitch an IT management deal to the United Kingdom Ministry of Defence last year, and EDS won the $7.6 billion contract. If even EDS biggest failure can be leveraged to earn new business, Jordan must be onto something by resurrecting the image of the companys founding father.

Rebuilding story No. 2: Oracle is "halfway" to Fusion—Oracles ambitious project to create a unified application and middleware platform by combining Oracles existing e-business applications with the approximately $19 billion worth of software and service companies Oracle has acquired over the past two years. Oracle President Charles Phillips said at an event last week that the "hard part" is over, but as Senior Writer Renee Boucher Ferguson reports this week, the second half of Fusion could lead to confusion for customers—both Oracles own and those it has acquired.

Even before it bought out PeopleSoft (and by extension JD Edwards), Siebel Systems and others last year, Oracle already was a large company. CEO Larry Ellisons aim was to take the leadership position in the enterprise applications space away from SAP, and it has passed the German company in size and annual revenues. Ellisons Oracle has always had ambitious goals (recall its network computing push in the late 90s). Considering the scope of this integration project, Oracle has fared remarkably well: Customer complaints have been few. The real test this year will be whether Ellisons ambitions and Oracles ability to deliver can find common ground with Fusion.

Send comments to scot_petersen@ziffdavis.com.

Scot Petersen

Scot Petersen

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture,...