Dell to buy Perot Systems for $3.9bn…. And Thus Are Fashionably Late To The IT Services Party

Frequent readers of this blog might recall that when HP bought EDS for $14 billion, I said the following:

The big loser in this has to be Dell who had been trying to make a move into that market, but with this purchase they might as well throw in the towel now as they have nothing that competes against IBM or “The New HP” as I am calling them. That’s because HP clearly made the decision to buy their way into that market rather than “roll their own” services arm like Dell has. And of course IBM has been in the services arena forever. That leaves Dell with nowhere to go IMHO.

Now Dell is trying to give itself someplace to go. They just bought Perot Systems for $3.9 billion. And in case you’re wondering, Perot Systems was founded by Ross Perot who tried to run for President of the USA on two occasions. In any case, Perot has clients in health-care, government and other commercial segments, spread across North America, Europe, the Middle East, Africa, and Asia. Last year they had revenue of over a billion dollars. I’m guessing that Dell is hoping that they can not only sell Dell branded gear to Perot Systems customers, but they can get some street cred from CIO’s as something other than a box pusher. However, one thing does pop to mind. When HP bought EDS, I said the following:

HP has a huge problem with EDS in terms of vendor independence. One of the good things about EDS is that they chose the best solution for you regardless of who the vendor was. HP is going to have to talk their way out of that apparent conflict, and that may create opportunities for Dell.

Well, the shoe is on the other foot now. Dell has a problem with Perot Systems in terms of vendor independence, and that my open up opportunities for someone else. I’ve never dealt with these guys, but I’m going to go out on a limb and says that they likely operated the same way that EDS did. Given that Ross Perot help found EDS, that wouldn’t be a shock if that were the case. So Dell is the one that will now have to talk their way out of that.

In any case Dell may be late to this party, but at least they showed up. Now let’s see if they can be the life of the party.

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