Some resellers could soon be locking horns with EDS after the services giant said it would treble the amount of work it does with local government and NHS trusts in the mid-market.

EDS has previously focused on large companies and government departments but following the launch of a new division, formerly Memorex Telex group, earlier this year, it will focus on firms or local authorities with a turnover of less than $500m (£318m).

EDS UK president Bill Thomas said: "We've never managed to crack the middle market but we have high hopes.

Peter Gatling, former managing director of Memorex Telex and head of the new EDS group, said it is already winning business because it has EDS behind it.

"We are definitely getting into places that we could not have got into before and are winning business that we wouldn't have won before," he said.

Gatling added that being part of EDS offers economies of scale, and products and services such as web hosting and application integration have now become available.

But Anthony Miller, analyst at Ovum Holway, warned that EDS has failed before in the mid-market.

"EDS is very well known for big jobs but has failed miserably in the mid-market," he said.

Ross Miller, managing director of VAR Trustmarque Solutions, said he was surprised by the move.

"It's a space that Computacenter and SCC play in, but EDS will need to partner with firms that understand that industry.

"It could be beneficial to smaller VARs, but could create more competition for the larger corporate VARs."

Sean Frohlich, chairman of reseller Teksys, said VARs are waking up to the public sector, which has remained buoyant despite the downturn.

"EDS will find moving down into the mid-market a challenge. Public sector players are fairly slow in changing their supply and buying habits. It won't be a quick win," Frohlic said.