Hewlett Packard Enterprise Services

Electronic Data Systems (EDS) was founded in 1962 by H. Ross Perot, a graduate of the United States Naval Academy and a successful IBM salesman who made first-hand observations of how inefficiently IBM's customers typically were using their expensive systems. Somewhat to IBM's chagrin, since the company wanted to sell as many computers as possible, Perot made a fortune changing this. An early success was in matching the unused computer time at Southwestern Life Insurance Company with the computing needs of rapidly expanding Collins Radio, both located in Dallas, Texas. Perot knew the inside details of both companies.

In its early years, EDS was a pioneer in facilities management – becoming the IT department for many companies – as well as beginning to service banks and provide early support for both Medicaid and Medicare in its home state of Texas. Leading the effort internally was Morton H. Meyerson, who joined the company in 1966 as the company's 54th employee. In 1967, he proposed the business model that eventually became known as "outsourcing" and which led to exponential growth for EDS.

In the 1970s, EDS expanded initially into more insurance services and later credit unions, and by 1975 revenue topped $100 million (~$451 million in 2024) and the company began bidding for work internationally. In 1978, EDS expanded into financial markets with the arrival of automated teller machines, electronic funds transfer and real-time point-of-sale terminals. Meyerson was named president in 1979, at which point EDS had revenue of $270 million (~$938 million in 2024), was free of debt, and had 8,000 employees.

In the 1980s, they expanded into travel services supporting payment services between travel agents and airlines represented by the Air Transport Association of America, and provided large-scale contracts for the US military.

In January 1981, EDS purchased Centurion Computer Corporation, founded as Warrex Computer Corporation in 1972, a manufacturer of small business minicomputers.

General Motors acquisition

In 1984, the company was acquired by General Motors (GM) for $2.6 billion (~$6.37 billion in 2024), with EDS becoming a wholly owned subsidiary of GM. Meyerson remained president, and in 1985, the company had a presence in 21 countries with 40,000 employees. Meyerson retired in 1987. During his years of executive leadership, EDS revenue grew to $4 billion a year, and the company grew to 45,000 employees. By the end of the decade, revenue was $5 billion.

In 1985, Electronic Data Systems (EDS) began moving into its new headquarters in the Legacy development in Plano, Texas, with the campus opening in stages and the main move completed by 1993, establishing a major corporate presence that spurred significant development in the area.

The relocation of Electronic Data Systems from its Forest Lane location to the Legacy development in Plano in the year 1985 was initially driven by the company's growth in the late 1970s.

EDS cataloged its services into three service portfolios; Infrastructure, Applications, and Business Process Outsourcing. Infrastructure services includes maintaining the operation of part or all of a client's computer and communications infrastructure, such as networks, mainframes, "midrange" and Web servers, desktops and Laptops, and printers. Applications services involves the developing, integrating, and/or maintaining of applications software for clients. Business process outsourcing includes performing a business function for a client, like payroll, call centers, insurance claims processing, and so forth.

Partners

EDS established a number of Business alliances with other companies through its global alliance program. The company has three types of alliances: Agility Alliances, Solution Alliances, and Technology Alliances.

The EDS Agility Alliance has worked on a range of projects, notably its Agile Enterprise. Members of the EDS Agility Alliance include Cisco Systems, EMC Corporation, Microsoft, Oracle Corporation, SAP, Sun Microsystems, Symantec, and Xerox.

Client contract controversies

In December 2003, EDS lost a 10-year £3 billion contract to run Inland Revenue IT services after a series of serious delays in the payment of tax credits, the contract instead being awarded to the company Capgemini. EDS had operated systems for the Inland Revenue since 1994 but the performance of its system had been low, causing late arrival of tax credit payments for hundreds of thousands of people.

In 2004, EDS was criticized by the UK's National Audit Office for its work on IT systems for the UK's Child Support Agency (CSA), which ran seriously over budget causing problems which led to the resignation of the CSA's head, Doug Smith on 2004-11-27. The system's rollout had been two years late and following its introduction in March 2003 the CSA was obliged to write off £1 billion in claims, while £750 million in child support payments from absent parents remained uncollected. An internal EDS memo was leaked that admitted that the CSA's system was "badly designed, badly tested and badly implemented". UK MPs described it as an "appalling waste of public money" and called for it to be scrapped.

In 2006, EDS' Joint Personnel Administration (JPA) system for the Royal Air Force led to thousands of personnel not receiving correct pay due to "processing errors". EDS and MoD staff were reported to have "no definitive explanations for the errors".

In September 2007 EDS paid $500,000 to settle an action by the United States Securities and Exchange Commission regarding charges related to overstatement of its contract revenues in 2001–2003. At the time these caused a fall in share prices in 2002 which led to legal action against EDS from US shareholder groups.

On October 16, 2007, British TV company BSkyB claimed £709 million compensation from EDS, claiming that EDS' failure to meet its agreed service standards resulted not just from incompetence, but from fraud and deceit in the way it pitched for the contract.

During the BSkyB case, it was shown that a managing director had obtained a degree over the Internet. Lawyers for Sky were able to demonstrate that the process for awarding the degree claimed would give a degree to a dog, and that the mark attained by the dog was higher than that of the HP executive, who was questioned on his expertise and integrity. HP lost the case with a preliminary £200 million payment ordered, whilst they appealed over the £700 million total.