Following suit
Dell has announced a definitive agreement to acquire IT services company Perot Systems for $3.9 billion and make it Dell's IT services arm. Margins are far greater in services than from just making and selling PCs.
This is effectively following a well-established precedent set, initially by IBM, which got out of the PC business entirely when it sold that part to Lenovo and has been making serious money out of services for years. HP bought IT services giant EDS last year so it's not entirely surprising to see Dell follow suit.
The additional pressure Dell faces is the greater cost efficiencies enjoyed by rival PC makers, especially those in the Far East. Acer is currently stealing market share from both HP and Dell thanks, in part, to its ability to undercut them on price. Dell has apparently decided that trying to compete with Acer on price is unsustainable in the long term and it would be better off diversifying its offering.
"This significantly expands Dell's enterprise-solutions capabilities and makes Perot Systems' strengths available to even more customers around the world," said Dell boss Michael Dell. "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 ever," added Perot chairman, Ross Perot Jr.
Incidentally, Ross Perot Sr. ran for the US Presidency as an independent in 1992 and received 18.9 percent of the popular vote.
