Changing the Channel: Networking VAR news

Sep 21 2009   8:01PM GMT

Dell buys Perot Systems: Channel conflict brewing

ElaineHom Elaine Hom Profile: ElaineHom

With the news of Dell’s purchase of technology service provider Perot Systems for $3.9 billion reaching the masses, I can’t help but wonder what Dell plans to tell its channel partners. Perot Systems, founded by the most famous IT service provider to ever run for president, Ross Perot, will become Dell’s service unit as the anchor acquisition for Dell’s global IT services business. (Ross Perot also seems to have the Midas touch as a service provider — he founded Electronic Data Systems in 1962 and sold it to GM in 1984 for $2.5 billion, which had a revenue of over $21 billion before HP bought it last year. If only he had this much skill in running a presidential campaign.)

It is a strategic move on Dell’s part. In the past, their service offerings have been basic, compared to larger competitors like IBM and HP. Acquiring Perot allows them to provide consulting and systems integration services at a higher level.

But at what cost? Dell has already been under fire as one of the biggest vendors to create channel conflict with its own partners since the creation of its partner program. And now that Dell is expanding its own services offering with this acquisition and gaining more than 1,000 new customers — mostly in vertical markets like healthcare and the government — it’s hard to imagine how this doesn’t create conflict with its already aggravated partners. 

“I don’t think that Dell is trying to be channel friendly,” said Peter Hirschfeld, CEO and president of Personal Computer Resources in Braintree, Mass., and former Dell partner. “They are on a strategic mission to compete at the highest level of services and with the acquisition of Perot Systems, they have arrived.” Hirschfeld also notes that Dell’s prior acquisitions of SilverBack and Everdream have provided Dell with the network management infrastructure services to compete with others.

Get more information on Dell’s acquisition of Perot Systems in this news article by Barb Darrow, Senior News Director for

I’d love to hear what networking solution providers have to say about this. Think Dell is trying to help partners or hurt them? Send me an email at

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