Hewlett Packard sets its sights on IBM

Hewlett Packard's $14bn deal to buy EDS will form the second-largest group in the lucrative IT services market, and help it to mount an assault on IBM’s leadership in the sector.

This is the biggest IT services deal ever, said Gartner analyst Ben Pring. Computer-and-printer giant Hewlett Packard is buying EDS, which manages other firms' computer systems and tasks such as order processing, for $14bn.

The deal would form the second-largest group in the lucrative but highly competitive IT services market and help HP mount an assault on IBM's leadership in the sector. But HP's shares fell by around 10% on the news.

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