EDS fights for top ranking

In a move to promote better value for clients, embattled IT services juggernaut EDS has vowed to fight to the bitter end to retain market share and see off rivals IBM, CSC and Hewlett-Packard.

Admitting the vendor has suffered a battering of late, EDS Australia executive director for federal government, Mike Smith, said EDS is planning a raft of new initiatives to claw back poll position from IBM from its current status as services bridesmaid.

"EDS certainly wants to regain market share...and if you look at people like Interdata, which produces statistics, EDS is positioned second in most market segments we compete in," Smith said.

Smith said he expected the formation of the EDS Agility Alliance - a collective of aligned global vendors including Cisco, Dell, EMC, Microsoft, Sun Microsystems and Xerox - to make a difference.

However, while boasting collective resources of more than $US150 billion in annual revenue and $13.6 billion in combined research and development, plans for the alliance in Australia are yet to be announced.

Mike Jordan, EDS chairman and CEO, said Agility Alliance was a central element of EDS's multiyear plan to regain market leadership. "This alliance goes much deeper than joint contract pursuits," Jordan said.

EDS is also spruiking its Global Partner Solutions (GPS) program, part of its contractual obligations towards local industry development, which stems from outsourcing contracts with the federal government.

Chris Mitchell, EDS Australia managing director, said program results exceeded initial expectations; however, following the election the government is yet to deliver a formal verdict on vendor performance for the current round of contracts.

"It's a value-add proposition with an opportunity for EDS to generate new business of its own," Mitchell said.

Meta Group senior research analyst, Dane Anderson, said EDS maintained leadership in the services market, but its position and market relevance were potentially compromised if it was unable to fix internal and external problems.

"EDS's CEO has labelled EDS 'a tale of two cities', categorized by the challenge of re-inventing its market perception from that of herding cats to one of untangling its internal hairballs," Anderson said.

Anderson added that EDS had "stumbled badly in recent years, suffering from over aggressive deal making, poor execution, and a fragmented operating model", and that EDS remained "incomplete from a full-service perspective".

IDC associate director of Asia Pacific Services, Phil Hassey, said EDS had suffered mishaps over the year resulting in market position decline.

"Some of these problems have been corporate problems in the US, and the loss of some major deals," Hassey said.

"It's a vicious cycle unfortunately, and these deals that were lost have meant that EDS has found if difficult to land other big deals."