Open Season On Outsourcers

Two years ago, many had written off tech services company Electronic Data Systems Corp. The Plano (Tex.) company had lost top clients because it lacked low-cost offshore capabilities, it faced deep financial trouble, and employee turnover was growing. But the company restructured, sacked its chief e...

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Bibliographic Details
Published in:Bloomberg businessweek (Online) 2006-04 (3980), p.48-49
Main Author: Manjeet Kripalani, with Steve Hamm in New York
Format: Magazinearticle
Language:English
Subjects:
Acquisitions & mergers
Computer service industry
Manycompanies
Outsourcing
Trends
Online Access:Get full text
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Summary:Two years ago, many had written off tech services company Electronic Data Systems Corp. The Plano (Tex.) company had lost top clients because it lacked low-cost offshore capabilities, it faced deep financial trouble, and employee turnover was growing. But the company restructured, sacked its chief executive, and sold off noncore businesses. Now, instead of the hunted, it has become a hunter. On Apr. 3, EDS offered $380 million for 52% of MphasiS, a Bangalore software and back-office services company. The industry expects all sorts of deals in coming months. IBM, Capgemini, and electronics manufacturing and design giant Flextronics have been scoping out potential targets, insiders say. And many Indian companies are looking for a marketing presence in the West in order to grow, while some of the country's early outsourcing entrepreneurs are ready to cash out, which will likely create new buying opportunities.
ISSN:0007-7135
2162-657X