HP pays BSkyB £318 million over failed project

Hewlett-Packard has settled a big lawsuit taken against it by British Sky Broadcasting (BskyB) for  £318 million.

The dispute was over Electronic Data Systems (EDS)’s failed implementation of Customer Relationship Management (CRM) services. HP acquired EDS in 2008, but also acquired its bad debt and the discontent it had left with BSkyB. It renamed its EDS division to HP Enterprise Services, but BSkyB still wanted to drag it through the courts, whether it had been rebranded or not.

There were already problems between the two companies in 2000, but EDS started its work properly in 2001 and was sacked by BSkyB in 2002 after only eight months, with the latter saying EDS had done very little work. The discontent eventually manifested in the courts in 2007, not long before HP acquired EDS.

In February of this year the courts found that EDS had intentionally lied about how long it would take to implement the CRM services that BSkyB wanted in order to win the deal over rival CRM group PricewaterhouseCoopers. The deal was worth £48 million at the time, a considerable amount, but considerably less than the payout to BSkyB that has just been agreed.

HP is paying £230 million in damages, along with a further £40 million in interest and tax. In February after the original court ruling it paid this £270 million, but it still owes a further £48 million for legal costs. HP itself paid roughly £40 million for its own legal team, making this whole debacle a very costly affair.

The disgruntled HP, which recently chopped 9,000 jobs, would only say: “This matter is now closed, having been settled fully and finally on mutually agreed terms.”