Learning From EDS

Sure, many of you do not compete with EDS in the field. But investigating its transformation from a stodgy bureaucratic firm to one that is nimble and innovative can be a valuable lesson for you and your business. This week's cover story by CRN Section Editor Marie Lingblom and CRN Editor/News Steven Burke outlines EDS' new focus and the secret to its success.

The success doesn't come easy. Remember, EDS is growing in a difficult market. The company had a 12 percent year-over-year revenue gain in 2001. Much of that growth stemmed from the IT outsourcing market, in which it grew by 12 percent to 14 percent to $15.5 billion for 2001. Its IT outsourcing business is built around leading with services, solving business problems and,in the process,selling billions of dollars worth of multiplatform products to customers. Does this model sound familiar?

Now, let's look at EDS' services portfolio. Where is it investing, and where does it see potential?

Its focus centers on application services, networked services and e-solutions. Outsourcing involves more than taking over IT functions. It also involves application development and database development,in essence, investing in software and network infrastructure expertise. The biggest portion of EDS' revenue today comes from what many of you are doing now and should be doing in the future.

What else is EDS doing? Well, it is partnering. Two years ago, this wasn't happening. But today, the company realizes it needs to partner to offer its customers the right solutions,again, a trend we are seeing and advocating in the solution provider market.

The potential for outsourcing is enormous. According to research firm IDC, the outsourcing market is expected to grow to $245 billion in 2004. IBM Global Services and EDS only account for one-quarter of the total market. If you follow the lead of successful companies such as EDS, you, too, can capture market share and grow.

Do you agree? I can be reached at (781) 839-1272 or via e-mail at [email protected].