Dell CEO Michael Dell said he considers Perot a premium asset that significantly expands Dell's enterprise capabilities. "There will be efficiencies from combining the companies, but the acquisition makes such great sense because of the obvious ways our businesses complement each other," Dell said.

Moreover, the two companies already have a well-established and productive working relationship, Dell's CEO told investors on Monday. "Jointly we have developed IT-centric solutions and innovative services for our shared customers -- particularly in the health care and federal government" market segments," Dell said.

An Anchor Acquisition

Founded in 1988 by IT industry pioneer and third-party presidential candidate H. Ross Perot, Perot Systems provides applications, technology, infrastructure, business processes and consulting services on behalf of businesses and organizations in North America, Africa, Asia, Europe and the Middle East. In its most recent four quarters, Perot Systems generated $2.6 billion in revenue from applications services (40 percent), business process outsourcing (24 percent), and business structure services (36 percent).

"We believe this is a critical acquisition in our strategy to transform the company," Dell CFO Brian Gladden told investors. "IT services will be a big part of our strategy and we were very focused on getting a great anchor acquisition."

It also was "very important" for Dell to acquire a scalable asset -- something that the company could "use in combination with its direct customer footprint and customer relationships to grow more quickly," Gladden said. "In addition, we think we can bolt on other assets, including our own."

One key benefit of the acquisition is that it gives Dell "immediate credibility" in services, noted IDC analyst Alexander Motsenigos. "This is especially the case in outsourcing, which has been a challenge for Dell," Motsenigos said.

Dell also expects to benefit from Perot Systems' particularly strong off-shore presence. "We will now have 23,000 people providing services out of India as a result of this [deal] -- not including other low-cost geographies," Michael Dell said. "So we think that this is a plus for the combined services organization."

However, Motsenigos noted that Perot Systems is not nearly as well known outside the areas in which it operates strongly -- like health care. So Dell's acquisition of Perot Systems, by itself, will not be nearly enough. "It all boils down to management and execution," Motsenigos said. (continued...)

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