||Lost legacy: 50 years after its founding, EDS name has evaporated
FILED UNDERBUSINESS AT DEC 2012 SHARE
Print This Story
Profile image for Gary Jacobson
Connect with Gary Jacobson Email
Don't miss a story. Like us on Facebook.
LIKE DALLAS NEWS' FACEBOOK PAGE
‹ Previous Next ›
No homegrown company has done more to shape the business and civic landscape of North Texas than Electronic Data Systems. Founded 50 years ago by Ross Perot, EDS invented an industry — building and running data processing systems for other companies and organizations — and formed the cornerstone of the Perot family fortune.
But the 21st century hasn’t been kind to EDS, now an anonymous part of the computer services division of Hewlett-Packard, based in California’s Silicon Valley. The EDS name has evaporated, and so has its legacy.
For some longtime former employees, the demise hurt almost as much as a death in the family. EDS was much more than a job; it was a way of life. They cite the corporate creed in one simple phrase: Keep the customer happy and do right by EDS and its employees.
Former general counsel Dick Shlakman started working with EDS as an outside attorney in 1964 and retired from the company in 1995. Anyone at EDS during that time frame, he said, experienced going to war with comrades.
And EDS employees didn’t necessarily go to war against an enemy, Shlakman said. They also faced the challenges and high expectations of the company itself.
“They enjoyed pushing large rocks up steep hills,” Shlakman said. “That legacy died.”
From the beginning, the company was a huge financial success, causing Fortune magazine in 1968 to call Perot the “fastest, richest Texan.” For Perot, that success led to others, including huge real estate development projects north of Dallas and Fort Worth, and decades of family philanthropy, from supporting the Meyerson Symphony Center to the new Perot Museum of Nature and Science.
Meanwhile, the legacy of EDS grew as the company rescued two of its workers held captive in Iran, was acquired by automaker General Motors then spun back out, and survived its own civil war when Perot left EDS and launched a rival firm, Perot Systems.
At one point, former EDS workers recently told The Dallas Morning News, the company almost bought half of Microsoft before it went public.
Microsoft co-founder Bill Gates is now the richest person in America, worth $66 billion, according to Forbes. Perot ranks 113th, at $3.5 billion.
After all those years of growth and excitement, the end for EDS came without a bang, and without much whimper.
As the computer world changed — think giant mainframes to desktops and laptops — so did computer services. The data center business became a commodity, available at low cost from competitors all over the world. EDS was slow to adapt. The company also lost some of its customer-first focus.
Forced by stagnating growth and its own financial problems to find a buyer, shareholders approved a $13.9 billion sale to HP in 2008. The new owner cut thousands of workers, many of them in North Texas, drastically cut pay of many remaining employees, ditched the EDS name, and auctioned off corporate art and memorabilia, including sculpted eagles that were a symbol of a patriotic company.
Perot loved the bird. Eagles don’t flock, he always said.
Now, HP has its own troubles and CEO Meg Whitman says she has a multiyear plan to solve them. One of the early steps was an $8 billion write-down associated with the EDS purchase, accompanied by more reorganizing.
During her October visit to HP’s Plano facilities, the former headquarters of EDS, Whitman was asked by The News how she would respond to longtime EDS employees who lament the company’s lost legacy.
“I appreciate the hurt some may have felt,” said Whitman, the former eBay boss who became CEO of HP in September 2011. “I acknowledge that and say let’s move forward. You should be proud of that legacy. Let’s build another.”
Sunday: The Perot Era (1962-1984)
Monday: The GM Era (1984-1996)
Tuesday: The Era of Decline (1996-2008)