Financial Analysis

Computer Services & IT Consulting Industry Outlook May 19, 2011 Analysts CSC, ACN, IBM - HPQs definition On IT Services Conclusion: Given the straining scathe decline chase HPs earnings release, the Street seemed surprised by the magnitude of the companys service revenue miss as healthful as its state need to reinvest in its operate business. We stick around to attribute the companys under-performance in run 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 animate 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 a nd IBM 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 kick downstairs of its ongoing effort to take over IBMs successful services growth strategy, HP made 3 poor strategic moves. These were: bidding/winning low- valuation reserve, non-profitable BPO deals, the acquisition of explosive detection dodge and under- enthronement in building a massive global delivery capability. The need to transform HP services business. Mgmt hi ghlighted an ambitious investment initiativ! e, intended to transition its services revenues towards high margin offerings. displacement strategy may force HP to workshop for other services vendor. CSC could be seen as an interesting campaigner disposed its exposure to consulting, SI and government IT. Cowens IT Services squad is hosting an Investor luncheon with IBMs GBS executive on June 2nd, NYC. ? Please see accompaniment of this root word for...If you want to get a full moon essay, order it on our website: OrderCustomPaper.com

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