Dick Brown To Analysts: 'EDS Is A Rock-Solid Company'

"It's been a difficult year, and we've been through our difficulties," Brown said in brief remarks at an industry analyst meeting here at the company's headquarters. "What's been covered up in this economic malaise so many businesses have found themselves in, including us, are the many positive, innovative, industry-changing things happening."

Brown, who spoke briefly and didn't take questions or interviews during the day, noted EDS is a "rock-solid [company moving past the noise" and is poised for growth by focusing more aggressively and creatively on clients.

Some of that noise grew louder this week when EDS was hit with what the company estimates will be a loss of 5 cents per share for its fourth quarter due to investment losses related to aircraft leases with United Airlines, which filed for bankruptcy on Monday.

The news follows the bankruptcy of major customers including U.S. Airways and WorldCom. EDS also recently lowered its profit expectations by about 80 percent during its third-quarter earnings call in October. The news sent EDS stock tumbling. Shares of EDS were trading Tuesday at $17.03, up slightly from Monday's close of $16.32, but down significantly from a high of $72.45 during the past year.

Tuesday's executive presentations to industry analysts didn't include financial details but instead focused squarely on the company's value proposition and strategic initiatives, such as the recently unveiled Best Shore program and formation of Client Solutions, Global Sales and Marketing units, aimed at better organizing efforts across company business lines.

Other key initiatives outlined by Brown and other EDS executives include a licensing agreement unveiled Tuesday with Digital Fairway, a Toronto-based communications software vendor. Leveraging Digital Fairway's eOSS software platform offers EDS employees and clients a way to automate communications infrastructure with a touch of a button, resulting in reduced costs and improved service, said Brown.

The on-demand type of service adds another layer to EDS' utility computing model, which EDS initially rolled out within its data center environment. EDS is already providing computing on demand via flexible pricing and storage on demand to clients such as 7-11 convenience stores and Coors Brewing. The agreements are a way of allowing clients to tap into storage and use of expensive, heavy-duty enterprise software applications as needed.

In addition, EDS formally announced the general availability of a new product, the Client Service Dashboard, used to monitor client service, as part of its Enterprise Performance Management line. The new product is based on the success of EDS' internal dashboard, which tracks its performance with its own clients.

Brown emphasized the need for IT service providers to focus on what he sees as a new value model emerging between service providers and their clients. The model, based on demand for superior client services, represents a more strategic approach to outsourcing and solutions implementation, he said.

"Businesses and governments around the world are closely assessing core strengths and are more willing to consider shedding noncore assets and processes," said Brown, adding, "Notice I said 'willing.' "

But while uncertain economic conditions have put off many of those decisions, Brown said he believes the demand is there and will materialize. To unlock that demand, said Brown, service providers must demonstrate real business value such as cutting basic infrastructure costs. EDS, he said, is committed to strengthening its global delivery model and industry expertise to earn its share of the emerging outsourcing opportunities.