PC maker Dell has purchased Perot Systems, the IT services solutions company founded by Ross Perot. Perot Systems, which in 2008 generated revenue of $2.8 billion, will become Dell's services unit, fortifying an area Dell believes is ripe for growth.
Dell announced on Sept. 21 that it has acquired Perot Systems, a
transaction it values at approximately $3.9 billion. The Texas computer
maker has been looking to expand beyond its core PC business,
particularly into the enterprise arena, and the technology and services
company - founded by two-time presidential hopeful Ross Perot -
will help it to do that.
"We consider Perot Systems to be a premium asset with great people
that enhances our opportunities for immediate and long-term growth,"
said Michael Dell, CEO and chairman, in a statement.
"This significantly expands Dell's enterprise-solutions capabilities
and makes Perot Systems' strengths available to even more customers
around the world. There will be efficiencies from combining the
companies, but the acquisition makes such great sense because of the
obvious ways our businesses complement each other."
Dell expects that the new company will enable it to provide a
broader range of optimally delivered IT services and solutions; extend
the reach of its services to additional customer segments; and supply
Dell computer systems to additional Perot customers.
In early September, Dell launched an extensive line of products and services, geared toward small, cost-conscious businesses
Service is an important aspect of courting this particular corner of
the enterprise, and among its offerings Dell includes a 24-hours-a-day,
7-days-a-week call-in support center.
Dell announced its second-quarter earnings for fiscal year 2010 on
Aug. 27, and while revenue was down 22 percent from a year earlier,
sales were up from the previous quarter. In
anticipation of the announcement, Broadpoint AmTech analyst Dinesh
Moorjani remarked in an Aug. 24 research note to investors that service
was an area that Dell should look to grow
, noting that competitor Hewlett-Packard's operating margin for services was 15.2 percent, to Dell's 4.9 percent.
"Services currently represent 10 percent of Dell's overall revenue
and include basic support and asset management services. ... Dell
recognizes that it has a significant corporate customer base that it
can leverage, and that services is the next logical step to drive
growth," wrote Moorjani. "We believe the services opportunity remains
largely unexploited, and will be incremental to the top-line, as well
as to margins as operating margins for services exceed the corporate
According to Dell, Perot Systems provides services that include
applications, technology, infrastructure, business processes and
consulting. Clients are said to include small businesses, as well as
global institutions in commercial segments such as health care and
government. The transaction is expected to close in Dell's
November-January fiscal quarter. Once complete, Perot will become
Dell's services unit and be led by Perot CEO Peter Altabef.
"Today's announcement is the next step in formalizing a relationship
that has flourished for some time," remarked Ross Perot Jr., chairman
of the board of Perot Systems, in the statement. "When my father
founded Perot Systems he envisioned a global information-technology
leader. The new, larger Dell builds on that promise and its own
successes by taking Perot Systems' expertise to more customers than