Courtesy of Sadagopan I saw this article about supposed discussions between EDS and Indian services vendor MphasiS. MphasiS has been in the news for a while now as being shopped so this may just be in another series of discussions.
MphasiS, with annual revenues around $ 200 m, is particularly strong in the financial services sector, reflecting the pedigree of many of its senior managers. Jerry Rao, the CEO, is one of the smartest men I have ever met and was also Chairman of Nasscom last year, the Indian software trade body.
MphasiS is valued much more reasonably than larger Indian firms (still pricey at about 2.5X revenues). If the transaction is done, EDS will be able to compete more effectively with MphasiS particularly against IBM and Accenture in the large banking and brokerage IT and BPO markets. Both IBM and Accenture use their captive (and much larger than EDS's) offshore staff for leverage in those markets.
EDS will have to unwind or re-focus an alliance it announced last year with Cognizant, which is itself a strong offshore player in financial services.
Update: April 4 - looks like deal is happening at better terms - $ 380m for 52% stake
