CXO

Hewlett-Packard deal hypes services dreams

Columnist Tom Rodenhauser foresees trouble if Hewlett-Packard goes through with a buyout of PricewaterhouseCoopers. Learn why in this week's Inside Consulting.


Now that Hewlett-Packard’s lusting for PricewaterhouseCoopers is out in the open, let’s consider the prospects. On paper, the logic of this deal is apparent: Big hardware maker transforms itself into nimble services company—look for fawning articles on the cover of your local business magazine.

But on closer inspection, this marriage has all the makings of an epic disaster.

Consider the players. PwC is less than three years removed from its own excruciating combination that mashed together Price Waterhouse and Coopers & Lybrand (remember the Big Six?). One analyst, obviously caught up in the moment, gushed about PwC’s brand. No disrespect here, but the PwC “brand” didn’t even exist three years ago!

Then there’s HP. When CEO Carly Fiorina took charge last year, she promised to reshape HP into an IBM clone. Unfortunately, HP didn’t have 10 years to organically grow its services division a la Big Blue. So HP put a call into the consulting world’s bullpen for a big strong lefthander who could “advise” HP clients. When PwC put itself in play last spring, this matchup became the world’s worst kept secret.

So why is this a potential train wreck? HP has the Herculean task of integrating 30,000 PwC consultants into a company best known for producing printers. Computer Sciences Corporation chief Van Honeycutt, in rebuffing Computer Associates’ failed acquisition bid two years ago, puffed that CSC would not become a “sales channel” for CA products.

Despite the PR prattle, an HP-PwC merger harbors no such illusions. Hopefully clients of both companies will see the same picture.

(Editorial note: Assuming that the deal moves forward, we’ll be analyzing the combined HP-PwC consulting operation in October’s Rodenhauser Report. E-mail info@consultinginfo for subscription information.)

Heard on the street
Deloitte Consulting’s full-page “come-back-home” ad, which appeared in many major business publications last week, inspired mixed reactions. The told-you-so tone rankled many e-consultancies. In fact, gleeful tribal dancing over the smoldering ashes of e-firms is a bit premature. Whatever homesickness has been inspired by the latest market gyrations, there won’t be a huge rush back to the megafirm bosom. Consultants aren’t that nostalgic.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2000, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.

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