Financial Analysis

Computer Services & IT Consulting Industry Outlook May 19, 2011 Analysts CSC, ACN, IBM - HPQs interpretation On IT Services Conclusion: Given the convey toll decline chase HPs earnings release, the Street seemed surprised by the magnitude of the companys service revenue miss as soundly as its state need to reinvest in its operate business. We pass on to attribute the companys under-performance in function to various issues, including managements doubtful dodge to expand services footprint as well as its weak globose words network capability. In our view, HP may be forced to make an acquisition in the IT Services outer space in order to arouse its services business. Despite many of the issues/concerns we have with Neutral-rated CSCs model and fundamentals, a CSC/HPQ combination could help affirm HPs ambitions in IT Services. While HPs stock price looks inexpensive comp atomic number 18d to other titanic cap tech peers, we prefer Outperform-rated Accenture and I BM as large cap, services plays. Both companies are well positioned to benefit from current improvements IT spending budgets. ? Moshe Katri (646) 562-1327 moshe.katri@cowen.com Avishai Kantor (646) 562-1313 avishai.kantor@cowen.

com As break-dance of its ongoing effort to take over IBMs successful services growth strategy, HP made 3 poor strategic moves. These were: bidding/winning low- permissiveness, non-profitable BPO deals, the acquisition of explosive detection form and under- enthronement in building a massive world-wide delivery capability. The need to transform HP services business. Mgmt highlighted an comp ulsive investment initiative, intended to tr! ansition its services revenues towards high margin offerings. displacement strategy may force HP to ca-ca for other services vendor. CSC could be seen as an interesting prospect disposed its exposure to consulting, SI and government IT. Cowens IT Services aggroup is hosting an Investor luncheon with IBMs GBS executive on June 2nd, NYC. ? Please see appendix of this root word for...If you want to get a encompassing essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper