"Hewlett-Packard has bought 'yesterday's business model'... it is unlikely to challenge our presence in the IT services space," IBM India VP & General Manager (Global Delivery) Rajesh Nambiar told PTI.

HP, largely a product company, last month bought EDS, a pioneer in outsourcing managed computer services, for 13.90 billion dollar.

Nambiar said the revenue from services business of HP-EDS combined entity is estimated at 36 billion dollars, whereas IBM's revenues from services is calculated at 52 billion dollars, indicating IBM's leadership in the services space.

Analysts feel the deal could pole vault HP to the second place in the global technology services industry after IBM, giving rise to steep competition.

"EDS have a huge labour force but they are concentrated in high-cost jurisdictions, and they really lack the global delivery capabilities that are expected of services, margins... or services businesses these days.