HPE has announced that it will spin off its enterprise services unit and merge it with CSC to create a new “pure play” IT services company. The new entity, which will come into existence no later than March 2017, will have US$26 billion of annual revenue in FY2016, making it the third largest IT services company. While the merger creates an entity with a substantial scale and delivery footprint that will be hard to match for most service providers, we expect the combined entity to face its own set of challenges as it looks to hit a solid growth trajectory.

This viewpoint provides an assessment of this proposed merger between CSC and HPE Services. The analysis covers the details of the merger, the opportunities and challenges for the combined entity, as well as implications for the broader market (competition and enterprise buyers).

The key themes explored in the report are:

• Important facts and figures detailing the CSC-HPE Services merger
• The key positives and expected challenges for the merged entity, both from a strategic and operational perspective
• Impact on various segments of IT service providers
• Implications for enterprise buyers