According to the Wall Street Journal (WSJ), Hewlett Packard (HP) was close to finalizing a deal to purchase EDS. The acquisition has been confirmed and it could mean tougher competition for IBM, WSJ reports.

While HP already offers a full range of security services, those services would expand and extend to new customers with the acquisition. EDS offers business and technology solutions, including many security services. In April 2008 EDS expanded its reach into security with its acquisition of Vistrom, a UK-based provider of information assurance and managed security services with 220 employees and approximately $100 million per year in revenue.

IBM offers its own line of security services, some of which are backed by technologies and services the company gained through its acquisition of Internet Security Systems (ISS) in 2006, which cost IBM $1.3 billion. The company currently offers services for compliance, identity management, and protection for data, applications, processes, physical infrastructure, as well as servers and client computers.

The deal was formally announced on Tuesday, May 13. Reuters reported that news of the deal caused EDS shares to rise 28 percent while HP shares dropped by 4.1 percent.