Dell announced their agreement today to pay a hefty sum for IT systems integrator Perot Systems Corporation. In an all cash deal valued at $30 per share, Dell will write a check for $3.9billion. In doing so, Dell will hold all the risk in the acquisition. Perot Systems has been in the IT outsourcing and government integration business for quite some time. However, due to their shrinking stake in the commercial IT world, they owned netted $31 million on $628 million last quarter.
Why did Dell pick Perot Systems? Easy, in this economy, those with the cash are out to grow and do so cheaply. Oracle, IBM, HP and [arguably] Rackable Systems have all made relatively lucrative buyouts on the cheap. The Sun buyout was certainly not cheap to the average Joe but think what it would have cost Oracle to execute the same buyout in 2000 or 2001. This move smells like Dell aims to grow their services business independent of the core product areas. Services is an area where they have lagged significantly behind their main competitors, IBM and HP, for quite some time. Perot was also the subcontractor on several US Federal contracts that could prove to be lucrative in the midst of a luke-warm economy.
How does this affect us in HPC? It would behoove Dell to not consider bidding on some of the larger HPC contracts at this point. The larger HPC organizations of the world expect service to be an integral part of a vendor’s win strategy. Ask ORNL how many Cray service technicians they have on site. Dell might now have a better play for delivering qualified service individuals deployed within the national labs.