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Dell Buying Perot Systems For $3.9 Billion
alphadogg writes "Dell has agreed to buy Perot Systems for around $3.9 billion in cash, and intends to make the company its global services delivery division, the companies said Monday.The deal will allow Dell to expand its range of IT services, and potentially allow it to sell more hardware to existing Perot customers, it said. Dell's rival Hewlett-Packard expanded its own global services unit with the acquisition of EDS for $13.9 billion in May 2008. Over the last four quarters, Dell and Perot together had revenue of $16 billion from enterprise hardware and IT services, with $8 billion coming from enhanced services and support, Dell said. Perot's contribution to that is relatively small: In 2008, the company reported total revenue of $2.78 billion."
... when I see the pie charts presented to show it happened.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
If I only had .0256% of that deal!
It would have been more entertaining if Perot bought Dell, then maybe I'd like them. After all, he caused the world's largest jailbreak that appears in the Guinness Book.
"The only legitimate use of a computer is to play games." - Eugene Jarvis
I think workers at Perot Systems just heard a giant sucking sound.
I am officially gone from
Dell: So, we were thinking we'd like to buy-
Perot: Can I finish?
Dell: Yes, but-
Perot: Can I finish... Can I finish can I finish can I finish?
Dell: well, naturally-
Perot: Can I finish?
Bow-ties are cool.
...and somewhat a reaction to HP's buy of EDS, I think.
Perot has some penetration inside the federal government, though I've never encountered one of their workers. Most of the job adverts I've seen require TS/SCI, so, probably some interesting stuff.
The question is whether Dell will be able to leverage it into other areas. I'm not sure how bright the future is in government IT services these days, following the monumental clusterfucks that HP and NG have chaperoned last few years (NMCI, and VITC).
Generally speaking buying any company outright that made 2.8bil last year for only 3.9bil is a steal. That's less than half what the company is worth on paper based on earnings alone.
The reason why MS beat out Apple was never about MS, but about the many PC builders. They were fast and limber in building new systems and designs.
Likewise, the Big 3 car companies were disasters because there was only three (that is why I have been arguing that we needed to break up GM and Chrysler).
Now, you have IBM, HP, Oracle and Dell all doing the same thing. That is they are exporting the jobs to Asia and there is really very little innovation (though in time, both China and India WILL be innovative) due to such few companies. What is needed is not to block this, but the West desperately needs to encourage small companies in all these industries. That means that if Obama, Brown, Sarkozy, Merkel, Harper, Rudd, etc want to bring back manufacturing to the west, they will need to start small companies, and buying from them.
I prefer the "u" in honour as it seems to be missing these days.
I've never worked for a more dysfunctional, management-laden organization than Perot Systems. God help Michael Dell.
Nothing to see here but us trolls...move along...
I have been to both Dell and Perot headquarters.
I ran into Ross (Sr.) in the lunch room. The entire HQ on Plano Parkway might as well be a history museum.
Contrast that with Dell's clinical feel.
It will be interesting.
H. Ross Perot starts a company (EDS), grows it into a huge business and sells it to GM in 1984. He presumably gets bored spending his billions on trivial things like yachts and mansions and uses it to start Perot Systems in 1988. HP, looking to pick up some of that IBM Global Services kind of action, purchases EDS in 2008 and to counter Dell acquires Perot Systems. Looks like Perot is nothing but an IT services arms dealer!
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Good luck on that.
H Ross Perot Sr owned companies were already big on outsourcing before outsourcing was even popular - when EDS (also started by Perot - he was on the board of directors for part of the time I was there) bought a company I worked for the first thing they did was gut benefits and lay off 20% of the US workforce (and in the next two years layoffs were roughly 40%, even though the division I was in grew by 6x) and move those jobs to India - and that was in 2000. If anything Dell moves people from India to China where people are even cheaper to hire.
The best day of my life was leaving EDS - the constant fear of layoffs, the downward spiral of their stock, their stupid moves like selling profitable divisions and keeping unprofitable ones so their stock wouldn't go junk (what I call the Control Data spin, and yes, I worked for them, too, albeit briefly).
This is all about Dell buying service revenues in health care and government, two areas that are getting s huge boost from the Obama stimulus package. In today's conference call, Perot Systems said it gets 48 percent of its revenue from the healthcare sector, and 25 percent from government. That's a strong footprint in two key growth areas, which is why Dell is paying a 65 percent premium to Friday's share price for Perot.