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."

Comments

I'll believe it...

[damn_registrars]

... when I see the pie charts presented to show it happened.

Interesting Buy....

[idiotnot]

...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).

Hmmm; this is REALLY Unhealthy

[WindBourne]

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.

Pretty funny

[ArhcAngel]

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!

Re:Sounds good for Dell

[Arthur Grumbine]

"Total Revenue" does not equal "made" in the normal sense. General Motors, now Motors Liquidation Company had Total Revenue for the last twelve months of 129 billion dollars. Yet they lost money overall (gross profit = $-1.6B) over that same period of time. What's their worth on the market right now, if you wanted to buy all their shares? 467 million dollars. Perot Systems did turn a gross profit of $487 million over the last year, but that puts the buy price at 8 times the yearly profit, maybe a good deal (there's a lot of other factors that are important, though) but not as much of a "steal" as you might have thought.

Generally speaking, speaking in generalities about a particular case is not always the wisest thing to do. Especially in something as complex as buying a multi-billion dollar corporation.