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Dell to Buy Perot Systems for Services

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dell-logoDell (s dell) said today it would pay $3.9 billion to purchase IT services company Perot Systems in a deal designed to help the computer giant compete as the business of supplying computer hardware becomes more entwined with offering services — from unified computing packages to fully-formed computing clouds. The industry has long criticized Dell for its poor services capabilities when compared with competitors such as IBM (s ibm) or HP (s hpq), and Dell CEO Michael Dell has been talking up the computing giant’s plans for game-changing acquisitions.

Dell has offered $30 per share in cash for Perot Systems. Peter Altabef, the current chief executive of Perot, will stay on to run Dell’s services business. The acquired company was founded in 1988 by Ross Perot, who twice ran for U.S. president. As part of this push to meld computing gear and services, HP last year purchased EDS, an IT services company that was also founded by Ross Perot, in 1962.  He may have failed twice in his bid for presidency, but he’s twice managed to build businesses that can change the fates of computing giants.

14 Responses to “Dell to Buy Perot Systems for Services”

  1. A PC Assembler + a US only outsourcer not equal any strategic advantage.

    HP + EDS –> had a big play on cloud computing — > next growth area

    Dell + Perot –> can only mint cash cow , legacy businesses – would be hard to be a growth driver

  2. P. Roagain

    “Here we go again” are the words Ross Perot used when he started Perot Systems after selling out EDS to General Motors to become a billionaire. The cycle is now complete. My condolences to all of the loyal employees who will be the casualties necessary to make the aquisition successful and Perot even richer. Hopefully, you’ll still be able to pay your mortgage/rent/car payments. Just check out the blogs about what happened to loyal EDS employees after the latest HP buyout.

  3. Yup,
    This is a disaster , Michael Dell wants to make extra money from services, but its fast becoming low margin business. Besides Perot is not in the same league as IBM’s business consulting or Accenture.

    I wish they bought PALM rather than Perot.

  4. Wow. That is a game changer of sorts….
    After HP/Compaq/DE lining up service and hardware…. took Dell long enough to decide to go this route….
    To bad they missed coming up with a competitive mp3 player/phone with a developer network… but hey competing the old fashion way on service and support has gotta work… doesn’t it?

    • Only if you know how to run the business.
      Perot FWIW, is not a big player in high end business /software consulting in commercial sector.
      Their major customers are government and healthcare sector. Dell can milk existing contracts for some time. But they ( both Perot and Dell) are way behind in terms of competing in high priced business consulting.

      They are good for desktop support, configuration management tools , help desk ticketing…
      which are not commodity business.