Consulting
References Practices Case
OCTOBER 7, 1994
While declining to give specific figures, Mr. Alberthal said a substantial portion of that revenue would be generated in Asia. EDS, Plano, Texas, is the computer-services subsidiary of General Motors Corp.
Calling Asia "the one market we misjudged," the chairman said the market for EDS's services in Asia "is growing two to three times as fast as we thought it would. " But he didn't offer any figures on how large EDS's market is.
Currently, Asia represents only a small percentage of the company's earnings. In 1993, 23% of EDS's revenue was generated outside the U.S., mostly in Europe.
In this year's second quarter, EDS's earnings were $197.3 million, up 11% from a year earlier. In the first half of 1994, EDS booked $6.02 billion in new contracts, compared with $7.03 billion in new business for all of 1993.
Mr. Alberthal said that over the next 18 months, he expects Asia to attract a "significant level of interest" from EDS's top management. While avoiding specific figures, he said EDS would most likely expand hiring and develop its regional consulting business.
EDS currently employs about 5,000 people in the Asian-Pacific region, up more than 50% in the past year alone. Worldwide, EDS has about 75,000 employees.
Edward V. Yang, group executive for the Asian-Pacific region, said EDS is helping several governments in the region prepare studies on how to structure their data networks, but he didn't identify which governments EDS is working with.
Last month, the state government of South Australia chose EDS to provide information technology services in an accord expected to have a value of more than $600 million over nine years. In August, EDS won a 45 million Hong Kong dollar (US $5.8 million) contract to design and install an automated system for Hong Kong's Immigration Department.
Mr. Alberthal said EDS is still exploring the possibility of an alliance with a telecommunications company following the breakoff in June of merger talks with Sprint Corp., the U.S. long-distance telephone company. But so far, EDS hasn't "found (an alliance) that makes sense," he said. However, EDS is still working with Sprint on certain projects and the possibility of linking up with Sprint at some future time isn't out of the question, he added.
GM purchased EDS in 1984 from founder H. Ross Perot, with GM's Class E stock tied to the performance of the data-services company.