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Friday, November 6, 2009

Dell Will Soon Close Perot Deal

Information Week

Computer maker Dell said it successfully completed its tender offer for Perot Systems' shares and is close to completing its acquisition of the Texas-based outsourcer.

The offer gives Dell more than 90% of Perot's outstanding shares. The company announced its intention to acquire Perot for $3.9 billion in September.

It said Tuesday it expects to close the deal "promptly." Dell plans to launch a new unit, Dell Services, into which it will integrate Perot's tech and business services offerings.

The merger could be a boon for enterprises looking to implement new architectures like virtualization and cloud computing—but those benefits will only be realized if Dell can successfully manage the integration challenges that will arise upon the deal's closure.

Dell has the hardware and, to a lesser extent, software needed to form the bedrock of advanced data center implementations.

The company recently partnered with VMware to bundle VMware's View virtualization offering on its Latitude and Optiplex client machines and on PowerEdge servers. It's also customized a line of servers to run Microsoft's cloud-based Azure operating system.

Perot, meanwhile, has expertise around integration, deployment, and management. In September it launched a cloud integration service under which it advises customers on cloud computing architectures, combines offerings from different vendors, and hosts and manages cloud solutions from its data centers.


The question is whether Dell can smoothly integrate a business from a market where it's had little experience. That aside, many observers believe Dell had little choice but to diversify given its falling hardware revenues.

Dell plans to bolt on other acquisitions to enhance Perot's global footprint. To date, Perot has mainly been a player in the U.S. market.

Current Perot Systems CEO Peter Altabef is expected to continue leading the operation. Plans also call for Perot chairman Ross Perot Jr. to join Dell's board. Dell said it believes the acquisition will contribute positively to earnings by 2012.