Electronic Data Systems

Electronic Data Systems (EDS) was an American information technology services company founded in Dallas in 1962 by H. Ross Perot. It became one of the companies most closely associated with the development of commercial information-technology outsourcing: rather than merely selling computers or software, EDS managed substantial portions of clients’ technology operations, including data centers, networks, applications, payroll systems, claims processing, and transaction platforms. Perot’s early insight came from observing that many IBM customers owned expensive computing equipment that was not being fully used. EDS initially created value by matching unused computer capacity with organizations that needed it. The company then evolved into a facilities-management provider, effectively operating information-technology departments for customers. Early work included services for insurance companies, banks, credit unions, and public-sector health programs such as Medicaid and Medicare in Texas. Morton H. Meyerson, who joined EDS in 1966, helped shape the scalable outsourcing model and became a major figure in the company’s expansion. During the 1970s, EDS broadened its work in insurance, financial services, electronic funds transfer, automated teller machines, and point-of-sale systems. It also began pursuing international contracts and entered sectors such as travel, telecommunications, and government services. In the 1980s, the company supported large government and military programs and expanded its international footprint. Its growth made it an attractive acquisition target for General Motors, which purchased EDS in 1984 for approximately $2.6 billion. EDS operated as a wholly owned GM subsidiary while retaining a distinct brand and substantial management autonomy. GM spun EDS off in 1996, returning it to independent public-company status and the New York Stock Exchange. As an independent company, EDS expanded through international operations, consulting, applications development, business-process outsourcing, and systems integration. It supported major global sporting events, including the 1992 Barcelona Olympics and the 1994 and 1998 FIFA World Cups. The company also secured large outsourcing agreements with organizations such as Xerox, Bank of America, American Airlines, Kraft Foods, General Motors, and the United States Navy. Its high-profile 2000 “Herding Cats” campaign helped reposition the company as a technology-management brand for the digital economy. EDS acquired or developed capabilities in consulting, application testing, banking processing, managed security, government software, and human-resources outsourcing. Its purchase of A.T. Kearney gave it a major management-consulting business, although that unit was later sold through a management buyout. In the mid-2000s, EDS also acquired a majority interest in Indian services company MphasiS and expanded its presence in offshore application and business-process delivery. In May 2008, Hewlett-Packard announced an agreement to acquire EDS for approximately $13.9 billion. The transaction closed on August 26, 2008, and EDS became an HP business unit. In 2009, it was rebranded as HP Enterprise Services. After the 2015 separation of Hewlett Packard Enterprise from HP, the business became part of Hewlett Packard Enterprise Services. On April 3, 2017, the former EDS operations were combined with Computer Sciences Corporation to create DXC Technology. Although the EDS brand disappeared as an independent operating identity, parts of its personnel, client relationships, infrastructure, and delivery practices continued within successor organizations.

EDS was founded in 1962 by H. Ross Perot, a former IBM salesman who believed companies could obtain greater value from computing resources through professional management rather than simply purchasing more hardware. One early arrangement paired unused computing capacity at Southwestern Life Insurance Company with the needs of Collins Radio. This helped establish the basic commercial logic of EDS: provide computing capacity and operational expertise as an ongoing service. The company soon moved into facilities management, taking responsibility for substantial portions of customers’ information-technology operations. Morton H. Meyerson joined in 1966 and helped develop the outsourcing model that became central to EDS’s growth. During the late 1960s and 1970s, EDS served insurance companies, banks, credit unions, and public-sector health programs. It expanded from batch processing into real-time financial systems, automated teller machines, electronic funds transfer, and point-of-sale technology. By the mid-1970s, its annual revenue had exceeded $100 million, and the company was beginning to pursue international work. In the 1980s, EDS added travel-industry systems, defense and military contracts, and broader international operations. It acquired Centurion Computer Corporation in 1981, extending its activities into small-business minicomputers. General Motors purchased EDS in 1984 for approximately $2.6 billion. Under GM ownership, EDS remained a major technology-services provider and expanded substantially in employees, countries served, and revenue. It also established its major corporate campus in Plano, Texas, with the relocation developing in stages from the mid-1980s through the early 1990s. GM spun EDS off in 1996. The independent company entered telecommunications and additional international markets, supported large sporting events, and won major outsourcing contracts. A 1994 agreement with Xerox was described at the time as the largest information-technology contract then signed. EDS also acquired Databank Systems in New Zealand and A.T. Kearney, a major management-consulting firm. The company worked on more than 1,300 Year 2000-related projects and invested in a new visual identity, including a new logo introduced around 2000. During the 2000s, EDS presented itself as a broad services company organized around infrastructure, applications, and business-process outsourcing. Infrastructure work included operating networks, mainframes, servers, desktops, and communications environments. Applications work covered development, integration, and maintenance. Business-process outsourcing included payroll, call-center operations, insurance claims, consumer lending, and other administrative processes. The company entered alliances with technology vendors including Cisco, EMC, Microsoft, Oracle, SAP, Sun Microsystems, Symantec, and Xerox. EDS expanded through acquisitions in India, government software, testing, managed security, and information assurance. It acquired a majority interest in MphasiS in 2006, bought RelQ in 2007, agreed to acquire a majority interest in Saber Corporation in 2007, and acquired Vistorm in 2008. It also operated or invested in related businesses such as ExcellerateHRO, Injazat Data Systems, SOLCORP, EDS Consumer Loan Services, and MphasiS. HP agreed to acquire EDS in May 2008 for approximately $13.9 billion, and the deal closed on August 26 of that year. EDS became an HP business unit, with Ronald A. Rittenmeyer initially continuing as its senior leader before retiring at the end of 2008. In September 2009, HP Enterprise Services became the principal market identity of the business. Following HP’s 2015 corporate separation, it operated within Hewlett Packard Enterprise Services. On April 3, 2017, that business was merged with CSC to form DXC Technology. The EDS name therefore ceased to function as an independent corporate brand, although successor organizations retained significant parts of its business and operating heritage.

1. 2017Merged into DXC Technology

   HP Enterprise Services combines with CSC, creating DXC Technology and ending EDS’s standalone corporate existence.

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2. 2009Rebranded as HP Enterprise Services

   The former EDS business begins marketing under HP Enterprise Services.

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3. 2008Acquired by Hewlett-Packard

   HP completes its acquisition of EDS for approximately $13.9 billion.

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4. 2006MphasiS majority interest acquired

   EDS acquires a majority holding in Bangalore-based MphasiS, strengthening application development and business-process delivery in India.

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5. 2000New brand identity and “Herding Cats” campaign

   EDS introduces a new logo and gains broad public recognition through its Super Bowl advertising campaign.

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6. 1996Spun off by General Motors

   EDS becomes independent again and is relisted on the New York Stock Exchange.

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7. 1992Plano headquarters campus opens

   EDS’s large Legacy campus in Plano, Texas, begins operating as a major corporate and data-center complex.

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8. 1984Acquired by General Motors

   General Motors purchases EDS for approximately $2.6 billion and operates it as a wholly owned subsidiary.

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9. 1981Centurion Computer Corporation acquired

   EDS purchases Centurion Computer Corporation, a small-business minicomputer manufacturer.

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10. 1975Revenue passes $100 million

    EDS’s expansion across insurance and financial services helps annual revenue exceed $100 million.

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11. 1966Morton Meyerson joins EDS

    Meyerson joins the growing company and later helps formalize the outsourcing model that becomes EDS’s principal growth engine.

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12. 1962EDS is founded

    H. Ross Perot establishes Electronic Data Systems in Dallas, initially focusing on more efficient use and management of computer resources.

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A global enterprise technology-services provider specializing in long-term outsourcing, infrastructure operations, application services, systems integration, and business-process management.

• Infrastructure ServicesIT infrastructure outsourcing

  EDS operated clients’ technology infrastructure, including mainframes, midrange systems, web servers, networks, desktops, laptops, printers, and communications environments. The offering extended from individual operational functions to full outsourced technology departments, making EDS responsible for reliability, support, maintenance, capacity, and service delivery.

• Applications ServicesApplication development and systems integration

  Applications Services covered the development, integration, testing, modernization, and maintenance of enterprise software. EDS worked with customers to connect business applications with infrastructure and operational processes, including expanded capabilities around SAP consulting and systems integration.

• Business Process OutsourcingBusiness-process outsourcing

  EDS performed selected business functions on behalf of customers, including payroll administration, call-center operations, insurance claims processing, consumer lending support, and related back-office work. This extended the company’s outsourcing model beyond technology operations into managed business activities.

• Government and Public-Sector SystemsGovernment technology services

  EDS designed and operated information systems for government agencies, defense organizations, and state administrations. Its public-sector activities included health-program support, military contracts, state-government software through Saber, and other large-scale systems requiring security, continuity, and regulatory compliance.

• Financial Transaction ProcessingFinancial technology services

  The company provided technology for banking and financial transactions, including automated teller machines, electronic funds transfer, real-time point-of-sale terminals, consumer loan support, and banking-processing operations. These services built on EDS’s early work with banks, credit unions, and insurance organizations.

• 2007Nobel Prize Series technology partnership

  International

  EDS entered a three-year agreement with Nobel Media and Nobel Web to become a Global Sponsor of the Nobel Prize Series and a technology-services partner for Nobel-related web properties.

  Outcome. EDS supported digital content and web-technology activities associated with the Nobel Prize organization.

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• 2003EDS Byron Nelson Championship sponsorship

  United States

  EDS served as title sponsor of the PGA Tour’s EDS Byron Nelson Championship from 2003 through 2008. The event was held near the company’s Texas base and supported youth and family-service organizations in the Dallas area.

  Outcome. The tournament was renamed the HP Byron Nelson Championship after the HP acquisition.

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• 2000Herding Cats

  United States

  EDS’s Super Bowl advertisement portrayed cowboys attempting to herd large groups of cats. The metaphor presented complex coordination as a business and technology challenge and helped make an otherwise enterprise-focused outsourcing company recognizable to a mass audience.

  Outcome. The advertisement became one of EDS’s best-known brand assets and supported its repositioning as a modern technology-services company.

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• 1998Derby County sponsorship

  United Kingdom

  EDS sponsored English Premier League football club Derby County from 1998 to 2001, using sports sponsorship to increase visibility in an important European market.

  Outcome. The sponsorship continued through 2001.

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• 2017Combine former EDS services business with CSCM&A

  Hewlett Packard Enterprise reorganized its services activities as part of a broader effort to create a focused technology-services company.

  What changed. HPE Enterprise Services merged with Computer Sciences Corporation to form DXC Technology.

  Aftermath. The EDS brand ceased to operate independently, although significant EDS-derived operations and capabilities continued within DXC.

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• 2008Agree to Hewlett-Packard acquisitionM&A

  HP sought to strengthen its enterprise-services business, while EDS was a large global provider with extensive outsourcing infrastructure and client relationships.

  What changed. HP agreed to acquire EDS for $25 per share, representing an enterprise value of approximately $13.9 billion; the transaction closed on August 26, 2008.

  Aftermath. EDS became an HP business unit and was subsequently marketed as HP Enterprise Services.

  Acquisition enterprise value. $13.9 billion (2008)

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• 1996Return to independent public-company statusStrategy

  General Motors decided to separate EDS after more than a decade of ownership.

  What changed. GM spun off EDS, which returned to independent operation and New York Stock Exchange listing.

  Aftermath. EDS expanded internationally, entered additional industries, and pursued acquisitions and long-term outsourcing contracts as an independent company.

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• 1984Accept General Motors acquisitionM&A

  EDS had grown into a large technology-services provider, while General Motors sought stronger control over its information systems and technology capabilities.

  What changed. EDS was sold to General Motors for approximately $2.6 billion and operated as a wholly owned subsidiary.

  Aftermath. EDS continued expanding under GM and was later spun off as an independent company in 1996.

  Acquisition value. $2.6 billion (1984)

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• 2017HP Enterprise Services merges with CSC to form DXC Technology

  The former EDS services business was combined with Computer Sciences Corporation, creating DXC Technology and ending EDS’s independent corporate identity.

  M&A
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• 2017Hewlett Packard Enterprise Services merged into DXC Technology

  The HPE services business was combined with Computer Sciences Corporation to form DXC Technology.

  M&A
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• 2009EDS is rebranded as HP Enterprise Services

  HP changed the market-facing identity of the former EDS business to HP Enterprise Services as integration into HP progressed.

  Other
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• 2009EDS began operating as HP Enterprise Services

  The former EDS business adopted the HP Enterprise Services market identity as integration with HP progressed.

  Other
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• 2008Hewlett-Packard agrees to acquire EDS

  HP announced a definitive agreement to acquire EDS for approximately $13.9 billion; the transaction closed on August 26, 2008.

  M&A
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• 2008Hewlett-Packard agreed to acquire EDS

  HP announced an agreement to purchase EDS for approximately $13.9 billion; the transaction closed on August 26, 2008.

  M&A
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• 2000EDS launches its “Herding Cats” brand campaign

  A widely recognized Super Bowl advertisement used the image of herding cats to communicate the complexity of coordinating technology and business operations.

  Campaign
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• 1996EDS is spun off by General Motors

  GM separated EDS as an independent public company, and EDS returned to the New York Stock Exchange.

  M&A
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• 1996EDS was spun off by General Motors

  GM separated EDS as an independent public company, restoring its standalone corporate status.

  M&A
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• 1984General Motors acquires EDS

  General Motors acquired Electronic Data Systems, making it a wholly owned subsidiary while preserving EDS as a distinct technology-services operation.

  M&A
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• 1984General Motors acquired Electronic Data Systems

  EDS became a wholly owned GM subsidiary in a transaction reported at approximately $2.6 billion.

  M&A
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1. Electronic Data Systems