EDS Sees 20 Percent 2001 European Sales Growth

"We had a great first quarter and expect more of the same," says European president John Meyer. "We're hoping to exceed 20 percent [sales] growth [in 2001]."

EDS said at its first quarter results in April that it expected revenues for the year would grow at or above a global market growth rate of 13 to 16 percent.

The upbeat news stands in stark contrast to Tuesday's sales and profit warning by French computer services company Cap Gemini, which has fueled fears the technology slowdown has had a severe impact on the IT services sector.

Cap Gemini says it now expects full-year sales of 9 billion euros, which would be a 6.2 percent increase from 2000 pro-forma sales of 8.471 billion euros.

Meyer says the difference between EDS and Cap Gemini is that EDS generates 85 percent of its sales by taking over the management of computer networks, also referred to as outsourcing.

"This is a time in which outsourcing is very successful because customers look for new ways to do business and reduce their costs," Meyer says.

Traditional IT services companies bill by the hour as they sell consultancy, systems integration and software development.

"[In contrast] Cap Gemini's business is time and material driven," Meyer says. "It's a discretionary expenditure for most of its customers."

Meyer also says he is looking for acquisitions in France and Scandinavia, after having plugged a hole in Germany with the pending takeover of Systematicks, which it expects to close on July 3.

"I still need to increase my critical mass in France and I need mobile capabilities that I may pick up cheap in the Nordic region," he says.

But he dismissed market rumors that EDS is interested in the troubled computer services integrator Getronics, of the Netherlands.

"Our name always seems to come up, but I don't want to take over their [Getronics] problems," Meyer says. "Not at this price."

Getronics has had trouble integrating its U.S. acquisition Wang, which it bought two years ago when the IT services market was at its peak ahead of the millennium turning point.

The Dutch company's CEO resigned recently.

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