Telecom Timeout

Sep 25 2009   12:46PM GMT

Dell buys its way into professional services – at what price expertise?

Kate Gerwig Kate Gerwig Profile: Kate Gerwig

Professional services expertise continues to grow in importance for telecom service providers and vendors trying to increase their revenue streams and looking at “Everything as a Service” to get there. Don’t have time to grow it organically? Just buy it. Take Dell’s agreement to buy Perot Systems for $3.9 billion.

Current Analysis analyst Amy Larsen DeCarlo is bullish on professional services but is a bit down on the deal because profits from the steep purchase price could be a long time coming – like possibly never. Still, Dell will gain the IT services capabilities on everyone’s wish list, including applications, technology, infrastructure, business processes and consulting.

With Perot in its pocket, Dell can compete with HP and IBM for lucrative IT services business by grabbing one of the last big integrators. Do we need to mention that the economic is still weak and the global credit crunch raises the question of whether Dell should keep its cash on hand or try to keep up with the Joneses of IT services.

Speculation aside, it’s a done deal now that the boards of both companies have signed on the line. It’s too late to wonder whether Dell would be better served looking for alternatives. The deal won’t close until late 2009 or early 2010, and we’ll keep watching to see if the cost vaults Dell into the game against the established players.

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