Customers of Hewlett-Packard
and Electronic Data Systems
offered a range of reactions Tuesday to HP's
$13.9 billion bid for the massive outsourcing company.

HP will benefit from EDS' talent pool, but the specter of layoffs -- which
EDS President and CEO Ronald A. Rittenmeyer indicated Tuesday would be possible
as the companies integrate -- raises concerns about customers' existing deals,
said Nina Buik, president of Encompass,
an HP user group that says it has 50,000 members.

"From a business perspective, I understand when you consolidate staff
there's going to be duplicate jobs," Buik said. "I want to make sure
the customers are still getting the level of service they signed up for. That
would be my concern."

HP's pending purchase, which will bring it in close competition with services
leader IBM, has been approved by both companies' boards of directors, and is
expected to close in the second half of this year.

The deal will result in a new unit called "EDS -- an HP company,"
based in Plano, Texas, where EDS has its headquarters. Rittenmeyer will lead
the new unit and report to HP CEO Mark Hurd.

Joe Lovetere, president of Hub
Technical Services, said he was surprised by HP's move, but called it "exciting"
and not likely to be a threat for his South Easton, Massachusetts, company,
which resells HP's hardware and provides services.

"I don't think that it affects our business in terms of the market segment
we have," he said, explaining that it is divided between the public sector
and small to medium-size companies. EDS goes after the biggest accounts, Lovetere
said.

One of those is Xerox,
which has spent billions of dollars on EDS services during the past couple of
decades. The company signed a $263 million deal in April that will see EDS manage
and support its end-users, service desk and mainframe operations. It was a recent
milestone in a long relationship.

Xerox's latest deal with EDS provides it with "flexibility in the event
of changing business circumstances," and the pending acquisition could
well qualify as such, said Carl Langsenkamp, director of public relations at
Xerox.

However, he declined to speculate on whether Xerox would, in fact, look to
alter the contract.

The company has a "two-fold relationship" with EDS, partnering with
it as a member of EDS' Agility Alliance, which brings together offerings from
a range of vendors into an "agile enterprise platform," he said.

Meanwhile, HP and Xerox compete in the office printing business, but Langsenkamp
downplayed the potential impact. "This move seems to retrench them in IT
outsourcing, but not document management," he

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