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Sep 21, 2009


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Man, you were right on the button here! Well its not ACS-CSC... but ACS-Xerox should do nicely!! This is another healthcare BPO related play... do you see healthcare hotting up already? Or is it a case of two gusts of wind do not make a typhoon? Love reading your blog, thanks!

Subir - thanks for your comments.

I agree with your last point regarding healthcare. If Dell can broaden and strengthen Perot's IT/BPO services in that vertical, they have a good growth opportunity there, but they already face incrasingly fierce competition from aggressive firms such as Cognizant and IBM in this space as they broaden their offerings across the entire healthcare value chain. I just struggle to see Michael Dell getting excited about business service-focused delivery at this point, and my fear is they focus too much on pushing commodity ADM services.

Your comments about large IT outsourcing deals are wide of the mark. Buyers don't care about hardware provision these days, and while it's refreshing to have another enterprise infrastructure player in there, it's a commodity business and most the large client deals are already parsed out. It's the remote infrastructure areas where we're seeing more opportunity, and I don't see Perot as a market leader there.

Re cloud, yes, there is an opporutnity, like there is for every service provider. However, the winners will be those which can develop unique software IP than supports quality business services on a one-many basis. Whomever hosts it on, and on whatever hardware, is largely irrelevant, as long as they meet certain standards,



At a first glance, it may appear that there are few synergies for the acquisition. On a closer look I find that there are some areas where it will make significant impact.

1. Large IT Outsourcing Deals: Many of the large deals involve a combination of ADM and Infrastructure component. In such cases, the combined entity will have a better play. Till now, we had only IBM and HP with such power, but now we will see Dell too.

2. Emerging Cloud Computing space: Dell will be in a better position to combine the hardware capabilities with the Perot's Business domain capabilities to come up with integrated offerings which will appeal to a large spectrum of business - especially the SMB business.

On the whole, there will be impact in Healthcare industry to start with. But this is possibly just the beginning - and in the next 3-5 years, Dell is likely to buy some more firms to create a bigger eco system to become a more formidable player.


Subir Dhar

Synergy or not, Michael Dell should take a look at a chapter from the history books...... Merger of Ross Perot's EDS and GM and figure out the real cost, down the road, of having Mr. Perot on the board of Dell. Mr. Perot's board seat on GM cost GM an extra $700M in just 2 years from the date they acquired EDS for $2.5B in 1984 dollars.

The real question is not how much Dell can leverage on Perot System's clients. It is how much can Mr. Perot help (or hurt) Dell's hardware business!

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