Electronic Data Systems

Last updated
Electronic Data Systems (EDS)
Division of HP
Industry Information technology services
FateAcquired by Hewlett-Packard
FoundedJune 27, 1962
as Electronic Data Systems
Founder H. Ross Perot
DefunctSeptember 23, 2009
Plano, Texas
Products Computer Services
Revenue US$22.1 billion (2007)
Number of employees
Parent General Motors 1984–1996
Hewlett-Packard 2008–2015
Hewlett-Packard Enterprise 2015-2017
DXC Technology 2017–present
Website www.eds.com

Electronic Data Systems (EDS) was an American multinational information technology equipment and services company headquartered in Plano, Texas.

Multinational corporation large corporation doing business in many countries

A multinational corporation (MNC) or worldwide enterprise is a corporate organization which owns or controls production of goods or services in at least two countries: including the home country and a country other than its own. http://www2.econ.iastate.edu/classes/econ355/choi/mul.htm%7Ctitle=Multinational Corporations|publisher=}}</ref> Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise.

Plano, Texas City in Texas, United States

Plano is a city in the U.S. state of Texas, located approximately twenty miles north of downtown Dallas. The city of Plano is a part of the Dallas-Fort Worth metropolitan area. Plano lies mostly within Collin County, but includes a small portion that extends into Denton County.



Electronic Data Systems (EDS) was founded in 1962 by H. Ross Perot, a graduate of the United States Naval Academy and a successful IBM salesman who firsthand observed how inefficiently IBM's customers typically were using their expensive systems. Somewhat to IBM's chagrin, since the company sold as many computers as possible, Perot made a fortune changing this. An early success was in matching the unused computer time at Southwestern Life Insurance Company with the computing needs of rapidly expanding Collins Radio, both located in Dallas, Texas. Perot knew the inside details of both companies. [1]

Ross Perot American businessman

Henry Ross Perot is an American business magnate, billionaire, philanthropist, and former politician. He is the founder and former chief executive officer of Electronic Data Systems and Perot Systems. He ran an independent presidential campaign in 1992 and a third party campaign in 1996, establishing the Reform Party in the latter election. Both campaigns were among the strongest presidential showings by a third party or independent candidate in U.S. history.

United States Naval Academy The U.S. Navys federal service academy

The United States Naval Academy is a four-year coeducational federal service academy adjacent to Annapolis, Maryland. Established on 10 October 1845, under Secretary of the Navy George Bancroft, it is the second oldest of the United States' five service academies, and educates officers for commissioning primarily into the United States Navy and United States Marine Corps. The 338-acre (137 ha) campus is located on the former grounds of Fort Severn at the confluence of the Severn River and Chesapeake Bay in Anne Arundel County, 33 miles (53 km) east of Washington, D.C. and 26 miles (42 km) southeast of Baltimore. The entire campus is a National Historic Landmark and home to many historic sites, buildings, and monuments. It replaced Philadelphia Naval Asylum, in Philadelphia, that served as the first United States Naval Academy from 1838 to 1845 when the Naval Academy formed in Annapolis.

In its early years, EDS was a pioneer in facilities management (becoming the IT department for many companies) as well as beginning to service banks and provide early support for both Medicaid and Medicare in its home state of Texas. [2] Leading the effort internally was Morton H. Meyerson, who joined the company in 1966 as the company's 54th employee. In 1967, he proposed the business model that eventually became known as "outsourcing" and which led to exponential growth for EDS.

Facility management is a professional management discipline focused upon the efficient and effective delivery of support services for the organizations that it serves. The ISO defines FM as the "organizational function which integrates people, place and process within the built environment with the purpose of improving the quality of life of people and the productivity of the core business."

Medicaid United States social health care program for families and individuals with limited resources

Medicaid in the United States is a federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services. The Health Insurance Association of America describes Medicaid as "a government insurance program for persons of all ages whose income and resources are insufficient to pay for health care." Medicaid is the largest source of funding for medical and health-related services for people with low income in the United States, providing free health insurance to 74 million low-income and disabled people as of 2017. It is a means-tested program that is jointly funded by the state and federal governments and managed by the states, with each state currently having broad leeway to determine who is eligible for its implementation of the program. States are not required to participate in the program, although all have since 1982. Medicaid recipients must be U.S. citizens or qualified non-citizens, and may include low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid.

Medicare (United States) United States single-payer national social insurance program

Medicare is a national health insurance program in the United States, begun in 1966 under the Social Security Administration (SSA) and now administered by the Centers for Medicare and Medicaid Services (CMS). It provides health insurance for Americans aged 65 and older, younger people with some disability status as determined by the Social Security Administration, as well as people with end stage renal disease and amyotrophic lateral sclerosis.

In the 1970s, EDS expanded initially into more insurance services and later credit unions, and by 1975 revenue topped $100 million and the company began bidding for work internationally. In 1978 EDS expanded into financial markets with the arrival of automated teller machines, electronic funds transfers and real-time point-of-sale terminals. Meyerson was named president in 1979, at which point EDS had revenue of $270 million, was free of debt, and had 8,000 employees.

Credit union member-owned financial cooperative

A credit union is a member-owned financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services.

Automated teller machine electronic banking kiosk

Ethiopia ATM machine onely opne money

Electronic funds transfer (EFT) are electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of bank staff.

In the 1980s, they expanded into travel services supporting payment services between travel agents and airlines represented by the Air Transport Association of America and provided large scale contracts for the US military.

In 1984, the company was acquired by General Motors for $2.5 billion, with EDS becoming a wholly owned subsidiary of GM. Meyerson remained president and in 1985, the company had a presence in 21 countries with 40,000 employees. Meyerson retired in 1987. During his years of executive leadership, EDS revenue grew to $4 billion a year, and the company grew to 45,000 employees. By the end of the decade, revenue was $5 billion.

General Motors American automotive manufacturing company

General Motors Company, commonly referred to as General Motors (GM), is an American multinational corporation headquartered in Detroit that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services, with global headquarters in Detroit's Renaissance Center. It was originally founded by William C. Durant on September 16, 1908 as a holding company. The company is the largest American automobile manufacturer, and one of the world's largest. As of 2018, General Motors is ranked #10 on the Fortune 500 rankings of the largest United States corporations by total revenue.

In the 1990s, in addition to its existing markets, EDS was entering the telecommunications industry and was providing IT systems in many foreign countries. They were providing information systems for global sporting events including the 1992 Barcelona Olympics, the 1994 FIFA World Cup, and the 1998 FIFA World Cup. In 1994, they signed what was at the time the largest information technology contract with Xerox for $3.2 billion and also bought the New Zealand banking processing company Databank Systems. In 1995 they purchased A.T. Kearney, the world's 4th largest private management consulting firm. In 1996, they became an independent company again and relisted on the New York Stock Exchange. Before the turn of the century they took part in over 1,300 Year 2000 projects.

In 2000, EDS launched a new logo with an award-winning Super Bowl commercial about herding cats. [3] Post-2000, they continued to sign long term, billion dollar contracts with organizations such as Bank of America, American Airlines, General Motors, Kraft Foods and the United States Navy. In 2006 they sold A.T. Kearney in a management buyout.

On May 13, 2008, Hewlett-Packard Co. confirmed that it had reached a deal with EDS to acquire the company for $13.9 billion. [4] The deal was completed on August 26, 2008. EDS became an HP business unit and was temporarily renamed "EDS, an HP company". Ronald A. Rittenmeyer, EDS Chairman, President, and CEO, remained at the helm and reported to HP CEO Mark Hurd until his retirement. [5] In December 2008, HP announced that Rittenmeyer would retire at the end of the month. [6]

As of 2008, EDS employed 139,000 people in 64 countries, the largest locations being the United States, India and the UK. It was ranked as one of the largest service companies on the Fortune 500 list with around 2,000 clients.

As of 23 September 2009, EDS began going to market as HP Enterprise Services, a name change which came one year after HP announced the acquisition of EDS, and which was a critical milestone as the integration of EDS into HP neared completion. [7]

On April 3, 2017, Hewlett Packard Enterprise Services merged with Computer Sciences Corporation to form DXC Technology. Retaining significant operations from Plano, Texas and many aspects of EDS. On June 1, 2018, DXC spun off the U.S. public services sector of the business through a Reverse Morris Trust, combining with Vencore and KeyPoint Government Solutions to create a new independent and publicly traded government contractor, Perspecta.

Company structure

EDS headquarters in Plano, Texas. GodPod.jpg
EDS headquarters in Plano, Texas.
EDS in Tower 500 at the Renaissance Center in Detroit, Michigan DPMoverRenCenstop.jpg
EDS in Tower 500 at the Renaissance Center in Detroit, Michigan

In 2006, EDS sold their management consulting subsidiary company, A.T. Kearney, in a management buyout and retained interests in five[ citation needed ] related companies:


Source: [8]

In June 2006, EDS acquired a majority holding in MphasiS, a leading applications and business process outsourcing (BPO) services company based in Bangalore, India.

In March 2007, EDS acquired RelQ Ltd, a testing company based in Bangalore, India.

In November 2007, EDS announced that it had agreed to purchase an approximate 93 percent equity interest in Saber Corp., a leading provider of software and services to U.S. state governments, from various sellers, including majority shareholder Accel-KKR, for approximately $420 million in cash. Saber became Saber Government Solutions after merging with other EDS state and local non-healthcare groups. In January 2009, it rebranded as EDS, an HP company.

In April 2008, EDS acquired Vistorm Holdings Limited, a provider of information assurance and managed security services based in the U.K. The acquisition will create one of the largest information assurance and managed security services firms in Europe. [9]

In May 2008, HP and EDS announced that they had signed a definitive agreement under which HP would purchase EDS at a price of $25.00 per share, or an enterprise value of approximately $13.9 billion. The terms of the transaction were unanimously approved by the HP and EDS boards of directors. The transaction closed on 26 August 2008. The companies' collective services businesses, as of the end of each company's 2007 fiscal year, had annual revenues of more than $38 billion and 210,000 employees, doing business in more than 80 countries.

In September 2009, HP purchased Lecroix Systems and incorporated it into the infrastructure of EDS to facilitate both in-house and client network security needs.

Revenue sources

For 2006, $9.6 billion of revenue came from the Americas (Canada, Latin America, and the United States); $6.4 billion from Europe, Middle East, and Africa; $1.5 billion from Asia-Pacific; Services' revenue was: Infrastructure $12 billion, Applications Software $5.9 billion, Business Process Outsourcing $3 billion and all other $421 million.

EDS announced the expansion of its SAP consulting practice: [10]

By collaborating with SAP on client engagement training and techniques that will drive the long-term growth of its consulting practice, EDS will further enhance its existing SAP capabilities and bring end-to-end SAP consulting and systems integration to the market by early 2008. Additionally, EDS will work closely with SAP's Global Partner and Ecosystem Group for market penetration and value-added customer offerings.


EDS campus in Plano, Texas EDS-Plano-TX-5071.jpg
EDS campus in Plano, Texas

EDS operated in 64 countries, [11] with the largest numbers of employees in the cities of Detroit, Michigan, USA; Dallas-Fort Worth, Texas, USA; São Paulo, Brazil; Washington, D.C., USA; Toronto, Ontario, Canada; Rome, Italy; Paris, France; Adelaide, Australia; Philadelphia, Pennsylvania, USA; Sydney, Australia; Blackpool, UK; Sacramento, California, USA; Tyneside, UK; and Barcelona, Spain. Other major facilities were in Argentina, Australia, Belgium, Brazil, Canada, Egypt, Germany, Hungary, India, Dublin, Ireland, Israel, Italy, Mexico, Netherlands, New Zealand, South Africa, Spain and the United Kingdom.

EDS's Plano, Texas campus is located about 20 miles (30 km) north of downtown Dallas. The campus consists of 3,521,000 square feet (327,000 m²) of office and data center space on 270 acres (1.1 km²) of land. The campus included four Tier-IV data centers, a command center, four clusters of office buildings, a fitness center, a service station, four helipads and a hangar. It is the center of the 2,665 acre (11 km²) Legacy in Plano [12] real estate development, which EDS built.

Company sponsorships

EDS sponsored the Premier League association football team Derby County from 1998 to 2001.

EDS was the title sponsor of the PGA Tour's EDS Byron Nelson Championship from 2003 to 2008, played in nearby Irving, Texas. In 2009, it became the HP Byron Nelson Championship. The tournament raises about $6 million each year for youth and family service centers in Dallas, Texas.

EDS signed a sponsorship agreement in 2007 with Nobel Media to become a Global Sponsor of the Nobel Prize Series, and with Nobel Web to become its Global Technology Services Partner. The three-year agreement enables EDS to apply its technology expertise for the benefit of the Nobel Prize Series and the organization's Web technologies, including supporting the development of content on nobelprize.org, Nobel's award-winning website.

EDS sponsored F1 team Jaguar Racing.


EDS cataloged its services into three service portfolios; Infrastructure, Applications, and Business Process Outsourcing. [13] Infrastructure services includes maintaining the operation of part or all of a client's computer and communications infrastructure, such as networks, mainframes, "midrange" and Web servers, desktops and Laptops, and printers. Applications services involves the developing, integrating, and/or maintaining of applications software for clients. Business process outsourcing includes performing a business function for a client, like payroll, call centers, insurance claims processing, and so forth.


EDS established a number of Business alliances [14] with other companies through its global alliance program. The company has three types of alliances: Agility Alliances, Solution Alliances, and Technology Alliances.

The EDS Agility Alliance has worked on a range of projects, notably its Agile Enterprise. Members of the EDS Agility Alliance include Cisco Systems, EMC Corporation, Microsoft, Oracle Corporation, SAP, Sun Microsystems, Symantec, and Xerox.

Major clients

Most of EDS's clients were very large companies and governments that need services from a company of EDS's scale. EDS's largest clients included Rolls-Royce plc, General Motors, Bank of America, Arcandor, Kraft, United States Navy, the UK Ministry of Defence and Royal Dutch Shell although General Motors announced plans to move 90% of its IT work back in house over the next 3 to 5 years starting in 2012. [15]

EDS formed the National Heritage Insurance Company in 1996. The creation of this subsidiary is to manage Medicare Part B services on behalf of the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA). NHIC handles call center, claims processing and payment, fraud investigations, physician enrollment etc. in many states of the US.

Another large EDS client is the United States Navy. In 2000, they won a contract for the creation of a US$9 billion Intranet linking the Navy and the Marine Corps, which was set to late 2006, but on March 24, 2006, was extended to 2010, adding $3 billion to the accumulated contract worth. This initiative is known as the Navy Marine Corps Intranet, or simply NMCI. In 2004, NMCI accounted for about 4% of EDS's revenue. NMCI has been called the largest private network in the world, with approximately 400,000 "seats". EDS provided the network, desktops, laptops, servers, telephones, video-conferencing, satellite transceivers, and overall management of the intranet. [16]

Following on to the NMCI type of services, EDS in March 2005 won a US$4 billion contract with the UK Ministry of Defence [17] to "consolidate numerous existing information networks into a single next-generation infrastructure ... The network will provide seamless interaction between headquarters, battlefield support and the front line, linking about 150,000 desktop terminals and 340,000 users in approximately 2,000 locations ..."

In February 2008 EDS signed a US$1.3 billion contract with the Infocomm Development Authority of Singapore, one of the largest IT projects ever undertaken in Asia. This agreement will help the Singapore government achieve a standard desktop, network and messaging/collaboration environment across its public sector by the end of fiscal year 2010. [18]

In October 2008, the U.S. Defense Information Systems Agency (DISA) signed a US$111 million contract with EDS. Under this contract, EDS will: conduct worldwide security reviews, deliver certification and accreditation support, provide independent evaluation of United States Department of Defense security policies, and conduct security assessments on DOD operating systems, applications, databases, and networks. DOD and EDS have had a 13-year relationship of providing DISA with a wide range of infrastructure services, hardware and software through the DISA I-Assure and Encore contract vehicles. [19]

Of historical significance, just prior to the overthrow of the Shah of Iran, EDS was the IT company that developed the Iranian social security information system. During the 1979 overthrow, several EDS employees were detained by the transitioning government of Iran, causing H. Ross Perot to undertake extraordinary clandestine measures to get these employees out of Iran. [20] These events were recounted in Ken Follett's book On Wings of Eagles .

Client contract controversies

See also

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