Big Blue to Meet Its Match in HP-EDS

Still, the acquisition of EDS blurs lines where standalone integrators were once hardware agnostic, Foster added, referring to the practice of allowing clients to choose their preferred equipment brands. "The smaller, standalone companies in services and software are going to feel more pressure" from both H-P and IBM to align themselves. And that runs counter to what is best for clients, who want choice.

Yet the market is far from a duopoly. Price competition comes from several large, unaffiliated integrators and outsourcing firms, such as Infosys(INFY Quote), Tata and Satyam(SAY Quote), Foster said.