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December 12, 2006

HP buys Knightsbridge

Hewlett-Packard Co has announced its acquisition of Knightsbridge Solutions Holding Corp, a privately owned consulting firm in the business intelligence and data warehousing space. Terms of the deal, which is expected to close in the next 30 days, were undisclosed.

By CBR Staff Writer

Once the transaction is completed, Knightsbridge will become part of HP’s technology solutions group. HP was tight-lipped about the deal and refused to provide any comments apart from its official release.

Knightsbridge focuses on complex information management projects like giant data warehouses for Fortune 500 enterprises. It consults and integrates around technology from vendors such as Oracle, SAP, Business Objects, IBM and Kalido, although the company doesn’t have any formal reselling or technology partnerships, according to Jonathan Wu, senior principal at Knightsbridge.

The company is on track to hit its goal of $130m in revenue for 2006, Wu said. The company last year expanded is presence across the Atlantic, setting up a London office to support some of its US clients’ European operations.

Knightsbridge now has 700 employees between the US and the UK, and Wu said the firm is gaining traction overseas, adding European employees and clients. He told Computer Business Review the company has its sights set on other regions, particularly in Asia.

Both Knightsbridge and HP said the acquisition will bring a more developed, end-to-end offering to their information management offering.

Over the years, however, Knightsbridge, has shown little appetite for acquisitions of its own. Since it started out in 1994, the firm has made only one purchase, the 1994 acquisition of Base Consulting.

The following year, Knightsbridge grew more than 100%, which is a testament to the success of the integration, Wu said, although he was unable to provide any insight into how the company will fit into to one the world’s biggest technology providers and services companies.

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After all, Knightsbridge CEO Rod Walker told ComputerWire last year that the company was skeptical about services M&As. Most of them don’t work, he said at the time. The cultures and business strategies of the two companies have to line up, but most people just look at the finance and strategy end of it. If the cultures of the two companies are not a near-perfect match, people will leave, and services is a people business.

But the BI/warehousing services market has seen plenty of consolidation, Wu explained. He said this trend will continue, but not at the same pace as in the past.

Previously the market was comprised of a variety of niche players that lacked breadth and depth of services, he said. Now we see a handful of large-scale service providers that hold more dominant industry positions.

Wu also noted that the company is seeing more large engagements worth more than $5m than before, particularly as the projects become more enterprise-focused, instead of coming from particular business units or departments.

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