Dell has been down in the dumps lately following lackluster performance. The once envy of the personal computing industry for its once avantgarde supply chain innovation has been on the prowl for acquisitions to get it back on track. But even Michael Dell’s return to the hot seat hasn’t boosted the company’s revenue – not that it should. At the end of the day, its all about technology, innovation, execution, and value.
HP has discovered that you don’t have to go direct in the low-margin, high volume PC business to gain market share. IBM took the easier way out of the PC business by selling the business to China’s Lenovo.
Dell has gone wide to get back its lustre. But its foray outside the enterprise array has probably confused its customer base of enterprises.
Speculation has been rife that Dell has been on the acquisition prowl to get out of the dumps. This morning, the Wall Street Journal reported that Michael Dell has inked a deal to acquire Perot Systems for US$3.9 billion.
Perot Systems focuses primarily in the healthcare and government sectors. What you’d think (and probably Dell hopes) is that the infusion of a services organization would allow Dell to enter every major industry that are the traditional stumping groups for HP and IBM.
Servics currently accounts for only 10% of Dell’s busines. Post Perot acquisition deal, Dell will suddenly gain 23,000 people in off-shore services capability – mostly out of India.
Forrester Research VP Pascal Matzke was quoted on CIO Today as indicating that the success of the deal for Dell will boil down to how well Dell is able to integrate the two different cultures.