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EDS history and culture  (Electronic Data Systems Corporation)   (Nov 14, 2023)

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EDS ownership history.

Founder Ross Perot retained 50% of the stock when EDS went public. GM contracts were 31% of revenue when he sold the company to GM in 1984. GM spun out EDS in 1996.

EDS sale to Hewlett-Packard. Due to declining growth and profits, EDS stock was down to $19 -- from $72 in 2001. EDS management and board negotiated the sale for $14 billion -- $25/share, a 32% premium. Completed Aug 26, 2008. EDS was temporarily structured as a subsidiary, "EDS, an HP Company." On Sep 23, 2009, it was renamed "HP Enterprise Services."

HP Breakup. On Nov 1, 2015, the legal name of the Hewlett-PackardCompany was changed to HP Inc. and a new, completely separate company Hewlett Packard Enterprise (green-rectangle logo; no hyphen) was spun out. Portions of HPE were later spun out into DXC and Micro Focus, which have spun out other companies.

HP Inc. is the overall legal successor to companies acquired by Hewlett-Packard before the company was split into HP Inc and Hewlett Packard Enterprise on Nov 1, 2015. In general, responsibility for original commitments to former U.S. employees of Compaq, DEC, EDS, etc. remain with HP Inc. regardless of whether their last business unit ended up in HP or HPE. (Canada and UK: HPE. Other countries vary.
Country-by-country details)

EDS timeline:

- Ross Perot founded EDS in 1962 and took it public in 1968 -- but retained 50% of the stock. He sold EDS to General Motors in 1984. Perot and his family received more than $1 billion in cash and GM stock. As a GM board member, he attempted to reform GM's management and culture. The company bought out Perot's GM shares at twice the market price in 1986. Perot then formed EDS competitor Perot Systems, which he sold to Dell in 2009.

- At the time of the acquisition, GM had "...more than 100 locations in the U.S. where sizable data processing staffs are employed ...a total of more than 2,000 MIPs [sic] computing capacity in the U.S. as compared to EDS' approximately 150 MIPs... We need EDS professionals in all categories to join our team at GM... people who are willing to respond quickly and be on-site at a GM location immediately; perhaps as early as tomorrow or next Monday. You should also be willing to relocate... If you have the desire and drive to be part of the EDS/GM team, please complete the attached form and give it to your manager today." --July 22, 1984 memo to EDS employees.

- GM spun off EDS in 1996.  "GM's complex relationship with IT"  GM contracts were 31% of EDS revenue at that time.

- Dick Brown, former CEO of Cable & Wireless and H&R Block, named EDS chairman and CEO in Dec. 1998. "Within weeks Brown cut 5,200 jobs." Source

- Fortune in Feb 2003: "EDS has a stock that's been flattened." Brown: "I have a very expensive wife." Source

- Michael H. Jordan, former chairman of CBS and PepsiCo, named EDS chairman and CEO in Mar 2003. Source

- The stock dropped from $76 in 2000 (source) to $19 in 2007.

- 2007 Workforce Alignment. From the  2007 EDS Annual Report:  "We increased the number of employees in Best Shore locations from approximately 32,000 persons at the end of 2006 to approximately 41,000 at the end of 2007... Our 2007 initiatives to increase capabilities in Best Shore locations included the transfer of certain internal administrative functions... We expect to significantly increase our overall investment in workforce alignment in 2008 compared to 2007. [Boldface added]  During the third quarter of 2007, we announced an early retirement offer ("ERO") for approximately 12,000 U.S. employees. Approximately 2,400 employees accepted the ERO. Employees accepting the offer will receive enhanced retirement benefits payable through normal payment options under the EDS Retirement Plan."

- 2007: EDS' last full year in business: 1% increase in year-to-year revenue worldwide. "As of January 31, 2008, EDS and its subsidiaries employed approximately 139,500 persons in the United States and 65 other countries around the world." Last (2007) Annual Report  [Discussion of the three major linens of business, competition, and risk factors -- pages 1-8.]

- 2008: In the last EDS quarterly report before the sale was announced in May 2008:
Three months ended March 31, 2008:  Revenues $5,365M; Net income $62M
Same quarter the previous year: Revenues $5,224M; Net income $164M
In short, revenues up by 3%; net income down by 62%

- EDS stock peaked at $72 in 2001 but was down to $19. The EDS board of directors negotiated the sale to HP. HP paid $25 per share in cash, $13.9 billion -- a 32% premium.

- Joint announcement by EDS and HP management on May 13, 2008. 

- Approved on Jul 31, 2008 by EDS shareholders owning 98.8 percent of the stock. Source

- Acquisition completed on Aug 26, 2008. Details and HPAA advice for former EDS employee shareholders 

- "EDS had approximately 140,000 employees as of 12/31/2007. HP had approximately 172,000 total employees as of 10/31/2007, including more than 70,000 services employees." Source

- At completion of the sale on Aug 26, 2008, EDS was temporarily structured as a wholly-owned subsidiary called "EDS, an HP Company." On Sep 23, 2009, it was renamed "HP Enterprise Services."

- 2012: "HP has provided support services to Medicare and Medicaid clients for 44 years, handling 35 percent of all Medicare and Medicaid claims in the United States and processing 2.4 billion healthcare transactions annually, including 1 billion in healthcare claims. HP provides an array of technology services for CMS and Medicare contractors, including data center services, maintenance of the Medicare Part B system and non-base system support." HP press release

- On Oct 21, 2015, Hewlett-Packard Company spun off Hewlett Packard Enterprise (no hyphen; singular.)

- 2016: Fortune article summarizing the HP Breakup.

- HPAA's unofficial list of EDS Acquisitions

- 2017: DXC formed from merger of CSC with HPE's enterprise services business.

- 2020: DXC sells U.S. State & Local Health and Human Services business to private equity company Veritas Capital for $5 billion in cash. New company named Gainwell Technologies. CRN article

EDS culture:

- "Eagles don't flock, you have to find them one at a time." Ross Perot

- "Grass Roots Wisdoms"

- "What is an EDSer? An EDSer is a person that goes anywhere, anytime, 24 hours a day, 7 days a week, to make sure that EDS is the finest computer service company in the world and that nobody beats us in competition." --Ross Perot, 1986

- WAAPDSUT. WAA (written by EDS corporate software in Dallas) P (program) DSUT (dataset utility.) Originally written for DOS in the '60s, this utility was the most heavily used dataset printing/dumping/comparing/ repairing etc. tool used by EDS systems engineers. Discussion on IBM Mainframe Forum

- "The GM system is like a blanket of fog. I come from an environment where, if you see a snake, you kill it. At GM, if you see a snake, the first thing you do is go hire a consultant on snakes. Then you get a committee on snakes, and then you discuss it for a couple of years. The most likely course of action is -- nothing. You figure the snake hasn't bitten anybody yet, so you just let him crawl around on the factory floor. We need to build an environment where the first guy who sees the snake kills it. " 1988 interview with EDS founder Ross Perot in Fortune -- four years after GM bought EDS. Nine months later, GM bought out Perot's GM shares at twice the market price.

- Dont focus on the sale. Dont focus on what you are going to get or what the company is going to get. Focus on the problem that needs to be solved. If you can do that, the money will take care of itself. Let the money be the byproduct of what you do, not the goal. ... Its that simple.

- I billed Frito-Lay $5,128 a month for data processing, he once recalled. I used odd numbers like 5,128 in those days to make it look like I knew exactly what I was doing and had figured everything down to the last penny. I tell my clients, You have to pay in advance. And when they ask why, I say, Its customary in the computer services industry. But the business is so new, there are no customs yet. Im making them up as I go along.

$14M Dallas symphony hall donation from Perot. "Don't name it after me." Dallas D Magazine article.

Books about EDS:

- The "Grass Roots Wisdoms" are listed and discussed in a short book by former EDS executive coach Gary Hassenstab. ISBN-10: 1537116061

- "A Unique One-Time Opportunity" by Eric O'Keefe; Copyright Morton H. Meyerson. More than 50 EDSers share the story of the history and culture through 1970. CreateSpace Independent Publishing Platform (October 2012) ASIN: 1478273321

- "Liberation Management" by Tom Peters. Chapter: "World's Largest Project Organization in the World's Zaniest Industry." Knopf (1992) ASIN: 0394559991   ASIN: 0449456781

- "My Experience In The House That Perot Built. Ive been rather successful and I owe a lot of it to the training I got at EDS." Online memoir by Alan Canton

Classic EDS ads:

- "Cat Herders" (Super Bowl, January 2000)  https://adage.com/videos/eds-cat-herders/897  YouTube: https://www.youtube.com/watch?v=hx1jdgTs03U  https://www.youtube.com/watch?v=Pk7yqlTMvp8

- "Airplane" (Thanksgiving, 2000)  https://adage.com/creativity/work/airplane/12924  YouTube: https://www.youtube.com/watch?v=L2zqTYgcpfg  https://www.youtube.com/watch?v=S_dgWl83cTM

- "Running of the Squirrels" (Super Bowl, January 2001)  https://adage.com/videos/eds-running-with-squirrels/877  YouTube: https://www.youtube.com/watch?v=X_SXL-LFvw4  https://www.youtube.com/watch?v=nGF5k8uzbRQ

Detailed article about the first ad, the campaign, awards, and news coverage: https://en.wikipedia.org/wiki/Cat_Herders

Marketing case study: http://marketing-case-studies.blogspot.co.uk/2008/09/cat-herders-campaign.html

EDS history. 2012 article series in Dallas Morning News -- "The lost legacy of EDS" [Limited number of free articles.]

Part 1: The Perot Era. "In the beginning, 1962, there was one very ambitious employee, Ross Perot."

Part 2: The GM Era. "In many ways, the dozen years of the GM era were the best and worst of business times for EDS."

Part 3: The era of decline. "After spinoff from GM, EDS days of independence were numbered."

Ross Perot obituaries:

Books about Perot:

Ross Perot

- "Searching for Perot -- My Journey to Discover Texas Top Family" -- by Dave Lieber. Yankee Cowboy Publishing (Sep 2021) 0983614962 Order from author

- "My Life & The Principles for Success" by Ross Perot. Summit (Sep 1996) ISBN-10: 1565302370 

- "Perot: An Unauthorized Biography" by Todd Mason. McGraw-Hill (Apr 1990) ISBN-10: 1556232365

- "Irreconcilable Differences: Ross Perot Versus General Motors" by Doron P. Levin. Little Brown (Mar 1989) ISBN-10: 0316522112   ISBN-10: 0452263867

- "On Wings of Eagles" by Ken Follett. Semi-fictionalized account of effort to rescue two EDS executives imprisoned in Iran. Morrow (Sep 1983) ISBN-10: 0688023711   ISBN-10: 0451213092   ISBN-10: 0451163532

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