HP's EDS Launches Government Market Initiative
EDS leverages recent Saber Government Solutions acquisition to capture business in thriving state and local government verticals. New areas include voter registration and public retirement administration.
EDS, the IT services giant owned by Hewlett Packard Co.. (NYSE: HPQ), has created a new state and local government division to boost its footprint in the state and local government markets, where healthy IT budgets present lucrative opportunities for VARs.
EDS move follows a December projection by Forrester Research of a 1.6 percent growth rate in 2009 for U.S. business and government purchases of IT goods and services, a spending boost from $564 billion to $573 billion. The researcher predicts that public-services spending and government spending will rise 4 percent and 2 percent, respectively.
The new EDS division will deliver soup-to-nuts IT services and hardware to government agencies and be part of EDS U.S. public sector business unit. Much of the divisions expertise will come from Saber Government Solutions, a wholly owned subsidiary of EDS, which EDS acquired in 2007 as Saber.
The re-branding of Saber Government Solutions is part of a strategic initiative to leverage the strengths of EDS and HP to enhance the combined companies' existing offerings and expand into new areas in state and local government, said Frank Chechile, vice president of the new division.
New areas for EDS to offer comprehensive IT solutions include voter registration, human services and public retirement benefits administration, he said.
Currently, EDS delivers a raft of IT solutions in numerous state and local segments, including election management, motor vehicle administration, tax and revenue management, child support enforcement, and child care management.
Chechile said HP and EDS are bullish about the opportunities for growth in state and local government IT markets, principally because government IT budgets for 2009 remain uncut for the most part.
A strong IT budget is key to all agencies, he said. All are tasked with two objectives in this economy cutting costs and improving their services.
He said IT products and services play a huge role in meeting those objectives -- by modernizing sometimes very old legacy systems, and by helping agencies to outsource services, thereby reducing costs.
Chechile said EDS offers comprehensive services that enable agencies to close budget gaps and boost efficiencies.
While Chechile has not noticed any government agencies cutting IT budgets, he has noticed that certain projects are coming under more scrutiny as agencies prioritize projects.
This has caused a slight elongation in our sales cycles, he said.