Five Things You Should Consider Regarding Dell's Acquisition of Perot Systems

Updated: September 21, 2009

Dell has announced plans to acquire IT services provider Perot Systems for US$3.9 billion. Dell plans to pay $30 per share for Perot's outstanding Class A shares, a significant premium over the current per-share price, which is around $18. The planned acquisition may look like Dell playing catch-up with IBM and HP, which are generating half or more of their revenues from IT services. However, Dell's move may be both more tightly focused and more well-timed than earlier services-related investments and acquisitions made by its older, larger competitors.

Consideration #2: Dell's timing could turn out to be very fortunate. "Though Dell is late to the services sector, its timing might prove opportune," according to the Wall Street Journal's story on the planned deal, "Perot Systems: Prescription for Dell's Service Business." "Tech spending in the approximately $2.5 trillion U.S. health-care industry is expected to grow by as much as 10% this year, according to findings from a recent survey by market tracker IDC. Gartner Inc., another market tracker, says health-care IT services revenue will have a compound annual growth rate of 5.1% through 2013. That natural growth could get a boost if the Obama administration succeeds in pushing through health-care overhaul, which would expand coverage to millions of Americans. Also auguring well for the acquisition: An earlier economic-stimu

Your company's IT infrastructure is a business-critical resource. If it relies on Dell and/or Perot solutions or services, now is the time to begin planning the questions you want and need to ask your representatives from either or both companies. Make sure you know what the right answers should be before sitting down with them -- and make sure their answers match yours. This approach will ensure that whether the deal turns out to be good for Dell and/or Perot Systems, it won't damage your company's abilities to translate its IT investments into business benefits.

Dell has announced plans to acquire IT services provider Perot Systems for US$3.9 billion. Dell plans to pay $30 per share for Perot's outstanding Class A shares, a significant premium over the current per-share price, which is around $18. The planned acquisition may look like Dell playing catch-up with IBM and HP, which are generating half or more of their revenues from IT services. However, Dell's move may be both more tightly focused and more well-timed than earlier services-related investments and acquisitions made by its older, larger competitors.

Consideration #2: Dell's timing could turn out to be very fortunate. "Though Dell is late to the services sector, its timing might prove opportune," according to the Wall Street Journal's story on the planned deal, "Perot Systems: Prescription for Dell's Service Business." "Tech spending in the approximately $2.5 trillion U.S. health-care industry is expected to grow by as much as 10% this year, according to findings from a recent survey by market tracker IDC. Gartner Inc., another market tracker, says health-care IT services revenue will have a compound annual growth rate of 5.1% through 2013. That natural growth could get a boost if the Obama administration succeeds in pushing through health-care overhaul, which would expand coverage to millions of Americans. Also auguring well for the acquisition: An earlier economic-stimu

Your company's IT infrastructure is a business-critical resource. If it relies on Dell and/or Perot solutions or services, now is the time to begin planning the questions you want and need to ask your representatives from either or both companies. Make sure you know what the right answers should be before sitting down with them -- and make sure their answers match yours. This approach will ensure that whether the deal turns out to be good for Dell and/or Perot Systems, it won't damage your company's abilities to translate its IT investments into business benefits.