When Worlds Collide

on Sep 21 by Barry Rabkin
Tags: Dell, Perot Systems
Comments: No Comments »

Wow. Dell announced today September 21 they were acquiring Perot Systems for a tidy sum of almost $4 billion. (Whatever H-P can do, Dell can do better??)

A few obvious thoughts immediately come to mind:

1. Perot Systems looked down the road and didn’t see any future (well, at least not a profitable future)
2. Perot Systems was open to being acquired
3. Dell realized they needed to be more than a hardware company (which is true… only selling a product, specifically a commodity product even if it can be somewhat tailored, is a recipe for being acquired yourself) and figured growing their footprint into professional services was the right move.

So, just a few questions:

• Does Dell realize that providing professional services is not a commodity business? (referring back to the title of this post)?
• Does Dell realize that providing professional services requires an entirely different set of skills (and expectations about training as well as reward and remuneration that building hardware requires)?
• What plans does Dell have in place to ensure they do not enforce their commodity mind-set on Perot Systems?
• How long after the economy improves will it take the Perot Systems consultants and SI professionals to leave?
• How does Dell intend to compete with H-P and more importantly with IBM ? (Sorry H-P, but I still think of IBM as the complete technology/consulting/outsourcing package)

What do you think? Will this marriage generate sufficient profitable revenue (i.e., at least meet if not exceed customer expectations) or is it another holding action like so many acquisitions are (regardless of industry)?