In a an effort to better compete with more diversified rivals like Hewlett-Packard and IBM, Dell on Monday jumped into the tech services market with the announcement of a deal to acquire Texas-based Perot Systems for $3.9 billion.
. . . . In acquiring Perot, Dell is following in the footsteps of IBM and HP-computer industry giants that in recent years have sought to build out higher margin IT services and outsourcing businesses to compensate for diminishing margins in the increasingly commoditized hardware market. Pairing services with hardware can also appeal to customers who prefer to deal with fewer vendors.
The addition of Perot "significantly expands Dell's enterprise-solutions capabilities and makes Perot Systems' strengths available to even more customers around the world," said CEO and founder Michael Dell in a statement announcing the deal.
In our prescient July 1 post, we opened by saying, "In a rapidly changing IT market, Dell has stood pat for a while as competitors have jumped into virtualization, the cloud, software, networking, and services. A few financial analysts feel Dell needs to quickly regain the confident aggressiveness that made it a global powerhouse earlier in this decade, and here are some acquisition targets they think will enable Dell to make that leap."
After listing those 15 prospective targets-which included Perot but also companies ranging from Salesforce.com to McAfee to Palm--here was our analysis on what Dell should do:
Meanwhile, Dell's got only limited presence in the emergent areas mentioned at the top of this piece, such as virtualization, cloud computing, and services. It's in those areas where Dell can make an impact by showing customers and competitors alike that it's going to remain a significant force to be reckoned with in the broad enterprise space for the foreseeable future. The alternative is to glide slowly down a path from strategic partner to tactical commodity vendor, and that way irrelevancy lies.
If I had to bet, I'd say Perot Systems and Dell will be having some very interesting conversations this summer - they could form a very strong combination and give each other vital new capabilities in the demanding enterprise-IT market that's taking shape around us.
So while we're far too humble around here to say "I told you so"-well, that's if you're willing to overlook our headline, plus the inference in our opening sentence, plus this sentence-we'd just like to say that this is an example of the unique value we try to offer you here at InformationWeek's Global CIO: other media properties specialize on telling you what's already happened, but we focus on helping you understand what's going to happen.