Dell CTO Says Perot Systems Acquisition Shows Dell Strategy

SAN FRANCISCO—Dell Enterprise CTO Paul Prince told eWEEK Sept. 21 that his company's pending $3.9 billion acquisition of Perot Systems is a clear signal to the world about Dell's overall strategy of bolstering its services offerings in order to establish itself as a full-blown enterprise IT supplier.

In other words, Dell wants to follow in the footsteps of IBM and Hewlett-Packard, and hopefully take away some of their considerable market share in the process.

Even though Dell ships about 85 percent of the laptops and desktops it makes to enterprises and offers plenty of services to go with them, it still has the reputation of being a consumer-oriented computer maker. That is the impression that Dell's leaders want to change.

"In the last two years, Dell has acquired a total of seven service suppliers, including SilverBack, MessageOne and others [such as ASAP Software Express, Everdream and ProSupport]," Prince said. "They all bring a little bit different expertise and [approaches] to what we're doing. It's totaling up into a well-rounded service offering.

"It's our job to make these all work together, so we can move up the food chain [in enterprise IT support]."

Prince, a former Intel manager and strategist, will be a key decision maker in helping Dell make that move. Part of his job will be making sure that all these new services support all the technical work he is overseeing.

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Acquisitions like that of Perot Systems are the way Dell plans to move to a new, all-purpose level in order to challenge IBM and HP and leave its old image behind.

Dell realizes only too well that as data center hardware—including its own—becomes increasingly commoditized, software and services become correspondingly more important in differentiating the leading server, computer and storage makers.

The Perot Systems acquisition should be a surprise to no one who is following Dell. Founder Michael Dell said in March that his company would be using its cash reserves to make strategic acquisitions in storage, servers and services in 2009. Dell explained that the company would add services that expand its enterprise capabilities in servers, storage, software and data center infrastructure.

"If you look in the last few years at the acquisitions we have made, it really has been focused in those areas," Dell said at the time.

Perot Systems, with 23,000 employees worldwide, has an excellent reputation and offers several services for enterprise data centers, including project planning, data center management and software management.

Prince, who will work closely with Perot Systems after the deal is finalized, will speak Sept. 23 on data center efficiency at the Intel Developer Forum in San Francisco.

Dell wants to play well with others in the data center in order to make sure its servers, storage arrays and data center management software work optimally wherever they are needed.

"We realize that our customers already have significant investment in their existing management tools," Prince said. "There are people who are deployed already in [Microsoft] System Center, BMC, [IBM] Tivoli or [HP] OpenView. And you can't throw that away. What we're trying to do is make sure that everything we do at a management layer plugs in synergistically to those higher-level tools."

That includes both software and accompanying services.

Dell will combine much of its service effort with partners—Microsoft is a key example, Prince said—so that "as we release new capabilities, they can take advantage of it. We've started some very strong partnerships with VMware in the same vein with Virtual Center, so you'll see more of that.

"We'll continue to work with partners to push out new features and new capabilities pretty aggressively. But it will continue to be a 'partnership' strategy for us. The whole management domain is so distributed that we recognize we have to be a good provider into any and all of those infrastructures."