[Info-vax] Services as a source of revenue

[Keith Parris]

On 8/22/2012 6:30 PM, Jojimbo wrote:
> Please help me here.  When it was digital, they bought someone (or at
> least expanded into the service space) that was going to make
> millions.  Then Compaq was also doing a similar thing.
...
 > And then when HP bought EDS who turned out to suck?

At the time Compaq acquired Digital, I remember words to the effect that 
Compaq's acquiring a service business was the most important piece of 
that acquisition.

Services in general is quite profitable. Consider Red Hat, which 
effectively gives away all the engineering work they do on Linux (Red 
Hat as a company is the single largest contributor to Linux -- see 
http://go.linuxfoundation.org/who-writes-linux-2012) and Red Hat makes 
all of their money on Services.

 From HP's just-released quarterly earnings (see 
http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-irhome)

Segment    Revenue    Earnings
PSG          9,592         567
Services     9,030       1,240
IPG          6,183         879
ESSN         5,348         690
Software       822         160
HPFS           235          88
         (figures in $millions)

So Services as a segment is the largest single contributor to HP's 
profits. And 70% of HP's Services revenues comes from the former EDS 
unit (the other 30% comes from Technology Services).

So your perception that Services is not profitable, or that HP's 
acquisition of EDS has not worked out, seems not to be the case, based 
on the evidence.