Hewlett-Packard Set to Swing at IBM

SAN FRANCISCO -- Hewlett-Packard(HPQ Quote) and Electronic Data Systems(EDS Quote) confirmed reports they're in "advanced discussions" to complete a merger that could reshape the market for technology outsourcing services.

The acquisition of EDS by H-P, which was valued at $12 billion to $13 billion in a Wall Street Journal report, would make H-P the No.2 player in the market, after IBM(IBM Quote).

"It creates the only other services business in the marketplace that's got nearly the scale that IBM does," says Bob Welch, VP of global services research at industry research firm Gartner. ...