MANILA, Philippines--HP says software-as-a-service (SaaS) is slowly making its way into corporate information technology systems but is mum about how EDS would figure in its services strategy.

HP acquired EDS in May last year in a deal valued nearly $14 billion. EDS provides outsourced software services and could play a role in HP's SaaS delivery model.

In a briefing Friday, regional HP executives, however, declined to comment about concrete plans for EDS.

Mark Sarbiewski, senior product director for HP Software, said EDS can do application testing services for end-users.

HP is aggressively building its software business, acquiring companies in recent years such as Mercury Interactive and Opsware.

With EDS, HP looks to bolster its standing as an integrated software and services provider like IBM.

Damien Wong, HP Southeast Asia general manager for software, said software is now one of the most profitable units for the American tech firm.

HP posted more than $3 billion in software revenues in its last fiscal year (ending October 2008), a 20 percent year-on-year growth.

Wong expects a good market for software in the Philippines driven by mergers and acquisitions.

He said: "M&As bring complexity due to merged IT systems. Booming sectors like outsourcing also impact spending since companies become highly dependent on IT infrastructure."

Moreover, Wong sees a good market in companies looking to replace decades-old proprietary software and adopting an "open" platform, a requirement when adopting SaaS.

"There's a lot of ageing applications that needs to be modernized. In short, it becomes more costly to maintain than replace old software," he said.