Dell Services is a new business unit formed by the acquisition. It aims to develop and deliver a best-in-class suite of end-to-end IT services and business solutions that reduce IT complexity and lower costs for customers.

The integration of Perot Systems means that the company now offers hosting, consulting, applications and business-process outsourcing services in addition to Dell’s existing managed and modular services.

Atul Vohra, head of marketing for Dell Services, says the campaign aims to build awareness of its new capabilities.

“We want to boost awareness of Dell Services. Dell is a ubiquitous brand with consumers and businesses. We want to leverage that awareness and build demand for our services, which so many businesses rely on every day,” he told Marketing Week.

Advertising will include B2B magazine ads, online activity and targeted DM activity.They will feature testimonials from leading business professionals hailing the service. Y&R, Axicom and Public Strategies have worked on the campaign.

“We want to boost awareness and increase unaided top-of-mind awareness (TOMA). We will be analysing how well this works and hope to reach as many business professionals as possible, driving more traffic to our websites and increasing TOMA to come ahead of our competitiors in this division,” says Vohra.

The combination leverages Perot Systems’ capabilities across Dell’s much larger customer base, spanning global corporations, government agencies, health care and educational institutions, and small and medium enterprises.

Dell Services aims to be one of the world’s largest technology services organisations with more than 41,000 experienced and skilled technology- and business-services professionals and revenue of approximately $8bn (£5.5bn) from enhanced services and support over the past four quarters.

In the first quarter of this financial year, Dell’s services revenues were up 32% to $2.79bn (£1.91bn), with most of the growth coming from its acquisition of Perot Systems last year.

Source:http://www.marketingweek.co.uk/news/dell-services-unveils-ad-campaign-to-boost-awareness/3014544.article

Senior management at Dell in Ireland have confirmed that following the company’s US$3.9bn acquisition of Perot Systems last year it is focusing on becoming a major outsourcing and managed services provider competing with HP, IBM and big five consultancies.

Once it just made the machines, now it’s planning on providing the services. In September last year, Texas-headquartered Dell acquired the IT services provider Perot Systems. “We consider Perot Systems to be a premium asset with great people that enhances our opportunities for immediate and long-term growth,” said Dell founder and CEO Michael Dell at the time

Source:http://www.siliconrepublic.com/news/article/15989/cio/dell-services-planning-to-become-major-it-consultancy

Dell announced today that its wholly-owned subsidiary, Perot Systems Government Services, based in Fairfax, Va., is providing a wide range of business process outsourcing (BPO) functions to help simplify operations for the U.S. Citizenship and Immigration Services (USCIS) Field Office Support Services (FOSS).

Starting March 15, Perot Systems began providing the necessary resources to help the agency process citizenship and immigration applications in more than 60 of the agency’s facilities across the country. In addition, the engagement also encompasses managing records distribution and maintenance, file operations and maintenance, file and pending application and petition inventory requirements, FBI name and fingerprint checks, interview and oath ceremony scheduling, and data entry.

Perot Systems Government Services will be the new prime contractor on the engagement with a team of five subcontractors: ASRC Management Services, DOMA Technologies, The Data Entry Company, LongView International Technology Solutions, Inc., and FedConsulting Inc. The USCIS FOSS contract is worth up to $120 million over a three-year period.

Quotes

Lee Carrick, vice president of Dell Services Federal Government: “The work we are providing to USCIS illustrates the strength and breadth of Dell Perot Systems’ capabilities in the federal marketplace. This award further exemplifies how the increased solutions we offer in the government sector solve our customer’s needs. In particular, this is an outstanding opportunity for us to deliver high-value BPO and consulting services to the success of the USCIS mission.”

Richard Pineda, general manager of the Department of Defense division for Dell Services Federal Government: “We are honored to be selected by USCIS as the primary services provider on this contract. After working with the USCIS to provide BPO services for the past six years, we are looking forward to further utilizing our commercial BPO expertise to help the agency improve the overall functionality of its field office operations.”

Source:http://www.marketwatch.com/story/dell-to-provide-business-process-outsourcing-services-to-help-uscis-enhance-more-than-60-field-office-operations-2010-04-14?reflink=MW_news_stmp

Acquisition ups local headcount to 21,500.

The acquisition of Perot Systems not only helped Dell India almost double its headcount to touch 21,500 — a quarter of its worldwide employee base — but also make India a delivery hub.

Peter Altabef, President, Dell Services, in a select global media conference call, said his company — the recently-formed unit post the acquisition of Perot Systems — had a total headcount of 44,000, of which 10,500 are in India.

(The Indian arm of Dell Services is a part of the wider Dell India).

Globally, Dell divided its business segments in five categories after acquiring Perot. These comprise large enterprises, small- and medium enterprises, public sector (government, healthcare and education), gadgets (includes smart phones) and services. In India, the company has adopted three focus areas.

“We want to use India as a critical hub for people across the world. In terms of our presence here, we have three areas. One is growing our India presence in terms of the hardware business. Two, entering into education and healthcare segment and then produce customised product and services. And, finally, managing and servicing offerings that we sell here,” said Anurag Jain, vice-president of Dell Services Delivery.

Dell Services has an existing relationship with Max Healthcare in India, since Perot Systems had a 10-year outsourcing deal worth Rs 90 crore with the company. This agreement marked Perot Systems’ first full infrastructure technology outsourcing in the Indian healthcare industry, as well as the company’s first India-based healthcare client.

For the services business, after the initial 90-day integration process, the company combined people from infrastructure development and the managed services team across the organisations and created a global delivery team that could be leveraged for further growth.

Altabef said Dell had “an end-to-end capability — from infrastucture to managed services to cloud computing — which will also help us to move away from the traditional corelation between revenue and headcount growth”.

Source:http://www.business-standard.com/india/news/dell-uses-perot-to-sharpen-india-focus/388472/

Last year the economic downturn caused some organizations to temporarily scale back on IT outsourcing efforts while they tackled more fundamental issues like keeping the company afloat.

This year, IT outsourcing is making a comeback… in Asia.

Dell Services  Chairman Jim Champy predicts the Asian IT outsourcing market will grow much faster in 2010. “IT outsourcing is set to rise in Asia as the region’s companies begin to modernize business processes and technology systems in a build-out that could last decades. We see, as most providers do, the Asian markets growing faster – clearly more than Europe, and certainly faster than the US,” explains Mr. Champy.

Offshore service providers who made significant investments in technology-related matters may have made the right move at the right time. As firms are already taking steps to outsource some information technology functions. One of them is U.S.-based commercial aircraft equipment manufacturer, Spirit AeroSystems , where some of its employees affected by the outsourcing plan will be offered jobs with International Business Machines Corporation  or Hewlett-Packard  –the providers taking over Spirit’s IT work, both of which have operations in Asia. Spirit spokesperson Ken Evans admits to not ruling out additional work that may be sourced out to offshore providers in the future.

A report from KPMG and the Asian-Oceanian Computing Industry forecasts that Asia will account for 26.3% of the total consumption of IT and BPO services in the next 10 years. In the last quarter of 2009, Accenture and Capgemini expanded their presence in Asia particularly in the IT services segment. This proves that clients and partners remain attracted to the abundance of technical skills at a low cost.

KPMG’s forecast may happen in the long-run but for the time being service providers are feeling the recovery at smaller proportions but at a higher volume of job requests. According to IBM and Accenture executives, “IT consultants are probably already feeling it: the start of a rebound in business. But there’s a difference this time. The rebound is coming mostly in smaller deals rather than in gigantic ones… customers are contracting for a higher volume of smaller jobs.”

Small deals comprise a significant fraction of IBM’s and Accenture’s total revenue stream. So it no longer came as a surprise when Accenture acquired RiskControl, a privately held IT consulting company. The acquisition is expected to improve Accenture’s set of risk management services as it tries to gain a strong foothold in the IT offshoring market.

Interestingly, technology vendors acquired technology consulting firms at a quick pace in 2009. Others who made similar acquisitions were Affiliated Computer Services or ACS , now a Xerox  company, and Perot Systems I guess they may all be getting ready to grab a chunk of the incoming deals.

Source:http://seekingalpha.com/article/190928-it-outsourcing-in-2010-smaller-deals-higher-volume

With its acquisition of Perot Systems, Dell is looking to quickly expand its capabilities in the $800 billion IT services space, currently dominated by IBM. Both Dell and Hewlett-Packard, which has integrated EDS into the fold, want to increase the recurring revenues available from their services businesses. Meanwhile, IBM continues to look to its massive software and research businesses to add more capabilities to its services offerings.

More than a month after closing the deal on a $3.9 billion acquisition of Perot Systems, executives from Dell went before analysts and reporters to tout the deal’s ability to help Dell expand beyond its systems-making roots.
During an hourlong Webcast Dec. 16, the Dell officials spoke of the potential financial boost (about $7.5 billion in annual revenues), the size of the company’s new services unit (42,000 employees), the size of the IT services market (about $800 billion) and Dell’s place in it (among the top 10) that the acquisition of Perot brought with it.

They also talked about catering to the “underserved” midmarket and how they planned to differentiate themselves from larger rivals such as IBM and Hewlett-Packard with modular offerings, high degrees of automation and shorter engagements.

“The old approach of embedding an army of consultants locked in processes, frameworks, and proprietary software and hardware is inefficient and burdens consumers and their customers with too high of a cost,” said Peter Altabef, president of Dell Services and formerly president of Perot. “In contrast, we want to help organizations innovate and focus on strategic objectives while spending less on routine IT management. This is a new initiative that is redefining services from the customer’s perspective, making IT easier to access and simpler to manage and, most importantly, aligning our solutions to our customers’ success.”

Paul Bell, president of Dell’s public sector group, said his company is looking at services engagements that run 60 to 90 days involving two or three Dell Services people.

“Our competitors continue to bring teams of consultants that don’t want to go away,” Bell said.

Dell is only the latest of the larger systems makers to see services as a way of expanding its reach beyond its rapidly commoditizing hardware business. HP, already a significant services player, has integrated services company EDS into the fold some 16 months after closing the $13.9 billion deal. Even printing giant Xerox is getting into the game, with its $6.4 billion purchase of Affiliated Computer Services in September.

All are looking, in one form or another, to mirror some of the success that IBM has had with its Global Services unit over the past 15 years, moving away from low-margin hardware sales to stronger services businesses that offer recurring revenues.

Source : http://www.eweek.com/c/a/IT-Infrastructure/HP-Dell-Look-to-Gain-on-IBM-in-IT-Services-Space-484004/

The top-tier Indian technology services companies, including Infosys Technologies, TCS, Wipro Technologies and HCL Technologies, willhave to brace for some stiff competition from Dell Services — the new player in the services arena. Particularly so, as the hardware maker’s services arm will focus on $20-50 million contracts, the sweet spot for the Indian technology service providers.

Computer maker Dell Inc on Thursday launched a technology services focused company, Dell Services,that will focus on the mid-market enterprise customers. The company has integrated Perot Systems to its services business. Dell bought Perot Systems in September for $3.9 billion, and the combined services entity has already pitched for 88 contracts. These contracts, mostly in the $20-50-million range are similar to what Indian technology players target.

Analysts say, the $7.5-billion services giant, with about 50% of its 42,000 workforce in India, could drive down prices, much like it has done in the hardware business and pose challenge for the Indian technology majors. “Dell might do to services what it has done to hardware by direct selling — bring down prices of services and put margins under pressure,” said Diptarup Chakraborti, principal research analyst, Gartner.

In a conference call, Peter Altabef, president, Dell Services, said: “The small and medium businesses are underserved, and we will go after them with customised services. Part of our strategy is to increase services offering from remote locations (like India). The Perot integration brings us lot of additional capability and cross-selling opportunity.”

Citing an example of cross- selling, Mr Altabef said for a manufacturing company, which was a Dell client on the hardware side, now does SAP consulting as well, an expertise Dell Services got from Perot. “We closed the deal in less than 10 days,” he added. In India, it recently won a Rs 90-crore contract from Max Healthcare. Among the services that the Dell will provide, include enhanced support, managed IT services, business process services, IT and business consulting, as well as applications development, maintenance and testing. The company will focus on healthcare, manufacturing and government businesses.

Amit Singh, head of IT practice at Avendus Capital, an investment bank, said: “Margins in hardware are wafer thin. Services will add to Dell’s profitability and add a complete solutions player to the market offering hardware and software services.”

Typically in hardware business, margins are less than 4% and in services over 20%. That’s why Dell acquired Perot Systems and now Dell Services could potentially change the way services are delivered. “They could offer some services on phone (much like the Direct from Dell’s PC selling model). The tele-services could be for support services and remote infrastructure management. Dell has very strong branding and could do to services what it did to computers — commoditise them,” said Mr Chakraborti of Gartner.

Dell has an edge over other services providers, as it offers complete hardware and software services capability, matched only by the likes of HP and IBM. Raman Roy, CMD, Quatrro BPO Solutions, said: “Dell will shake up the market and create services at multiple price points. Dell will also expand the market with its hardware-cum-services offering, as a single-window capability to mid-market is not available. Competition from Dell will impact profitability and pricing.”

Dell Services’ plan to target the mid-market segment and helps the new player differentiate from the big boys like IBM and Accenture. Many of the mid-market customers are not interested in doing business with the really big outsourcing firms.

Steve Schuckenbrock, Dell’s president for large enterprise operations, said: “Lot of outsourcing companies will talk about the big mega deals. The sweet spot for Dell Services is a contract value of up to $50 million in the 3-6 years time frame.” That’s what Indian majors primarily target and will have to cope with one more competitor.

Source : http://economictimes.indiatimes.com/infotech/ites/Dell-logs-on-to-tech-services-business/articleshow/5353654.cms

Dell leaders today will tell investors and others that the company’s integration of Perot Systems into a broader Dell Services organization is progressing well, and will benefit customers by making information-technology solutions easier to access and simpler to manage.

“Dell now has a comprehensive and growing set of leading solutions that meet customer needs, so they can manage their IT most efficiently,” said Peter Altabef, president of Dell Services. “The Dell Services and Perot heritage of strong customer focus positions us extremely well to help customers of all types and sizes use IT to solve problems and derive the best value for their technology investments.”

According to Mr. Altabef, Dell Services is focused on combining its knowledge of different industries and requirements, together with Dell’s technology-platform expertise, to help customers succeed in:

Dell acquired Perot Systems on Nov. 3, in the process extending the reach of Dell Services into consulting, applications, business-process outsourcing and hosting. The combination immediately expanded Dell’s already significant range of managed and modular services, and makes all existing and future capabilities available to Dell’s large global customer base.

Mr. Altabef; Brian Gladden, Dell’s chief financial officer; Steve Schuckenbrock, president, Large Enterprises; and Paul Bell, president, Public, are to update investors and equity analysts on the progress of the integration in an 8 a.m. EST conference call today.

Dell will consolidate financial results from Perot Systems beginning with Dell’s fiscal fourth quarter, which ends Jan. 29. The company expects Q4 revenue from the former Perot Systems business to be similar to what Perot reported in its third quarter, though there is typically some seasonal softness in the fourth quarter.

Dell expects to recognize an estimated pretax expense of $120-130 million in the fourth quarter, and about $20-25 million per quarter throughout fiscal year 2011, for costs related to the Perot Systems acquisition. Dell anticipates amortization of intangibles related to the acquisition will be about $40-50 million in the fourth quarter as well as in each quarter of fiscal year 2011, in addition to the $40 million in amortization Dell typically reports in a quarter.

Separately, Dell said it will incur combined, pretax organizational-effectiveness expenses of $80-120 million in the fourth quarter resulting from the transfer of its Poland manufacturing facility, together with additional optimization of facilities, products and processes.

Additional information about the integration of Perot Systems and separate organizational effectiveness is available in the conference presentation.

Source:http://dallas.dbusinessnews.com/viewnews.php?article=bwire/20091216005107r1.xml

Dell is outsourcing the production of its Mini 3 smartphones to the Foxconn Electronics (Hon Hai Precision Industry) Group and also plans to outsource the production of its MID products to Qisda, according to a Chinese-language Commercial Times report.

Foxconn will manufacture the Mini 3 on an ODM basis with the production including a 2.75G Ophone version for the China market and a 3G version for the Brazil market, the paper said.

Meanwhile, Dell has teamed up with Qisda for the development of its MID lineup, and plans to launch its first MID model in cooperation with AT&T in 2010, the paper added.

Source:http://www.digitimes.com/news/a20091117PB200.html

Dell announced on Tuesday that it has completed its $3.9 billion offer to buy Perot Systems. By accepting Perot’s stock at $30 per share, Dell will own more than 90 percent of the company.

Dell’s takeover of Perot has created a new business unit called Dell Services, which will provide IT services to customers. Dell’s reach will now extend into technology hosting, consulting, and application outsourcing, among other segments.

Former Perot Chief Executive Officer Peter Altabef will become president of Dell Services, reporting directly to Dell Chairman and CEO Michael Dell. Altabef has steered Perot for the past five years as the company expanded its operations into more than 25 countries and captured sales of $2.8 billion in 2008.

“Dell Services will be a powerful organization with the extensive capabilities and global reach to address the needs of organizations of all types,” said Altabef in a statement. “The Dell and Perot Systems integration teams have been extremely productive in their planning, and we are ready to work on behalf of all our customers.”

Dell is looking at Perot to expand its niche in technology consulting and other services, combining its own large customer base with Perot’s vast IT services. Also appealing is Perot’s huge market in hospitals and medical facilities, a growing segment driven by the need to streamline and modernize the health care industry.

Dell revealed its intent to buy Perot Systems on September 21. No date was announced for completion of the acquisition, but Dell said it expects it to be done promptly.

Originally posted at Business Tech

Source: http://news.cnet.com/8301-27083_3-10389575-247.html

Dell Inc. is outsourcing to Mexico and other countries the work done at the North Carolina manufacturing plant the company is closing.

Round Rock-based Dell (Nasdaq: DELL) revealed the plans in a Trade Adjustment Assistance Act petition that the computer maker filed this week with U.S. Department of Labor, according to several published reports.

Dell is cutting nearly 1,000 jobs as a result of the move. The first 600 workers will lose their jobs next month.

“Our work volume is being transferred to a global manufacturing network,” Dell reported in the filing. “The work will be given to third-party providers who operate in Mexico and other countries around the globe.”

Dell, the No. 3 computer maker in the world, employs about 16,000 Central Texas workers.

Company officials said the North Carolina closing is “simplifying operations and improving efficiency.” Dell has been attempting to reduce annual operating costs by $4 billion.

Meanwhile, the company continues with the $3.9 billion acquisition of Plano-based Perot Systems Corp., which was announced last month. It would be the largest acquisition in Dell’s history.

Source: http://austin.bizjournals.com/austin/stories/2009/10/12/daily34.html

1) Will the howling from nativists in labor unions, lobbying firms, and the U.S. Congress eager to curry favor with those unions persuade President Obama to pursue the devastating protectionist measures he has advocated recently based on his faulty presumption of the existence of something he calls “our jobs”?

2) Will CIOs and CEOs have the vision and the wisdom to leverage this heightened competition not just to pound on suppliers for lower prices but instead to pursue new types of outsourcing engagements that help transform their companies into agile, flexible, and customer-driven organizations?

First, here’s what the Journal had to say about the huge transition major Indian IT services companies have begun to undertake:

Indian technology-outsourcing companies no longer just want to serve their clients’ computing departments—they want to be them.

… They are aggressively pursuing on-site work like managing companies’ entire information-technology departments, networks and help desks. They are looking to run external data centers for customers — a foothold that would help them expand into the hot new area of “cloud computing,” where all of a company’s critical software is hosted remotely. And they are trying to tie all of their services into end-to-end outsourcing packages for clients.

How well the Indian firms manage to upgrade to this more sophisticated work in the next few years could determine whether India’s $58.8 billion-a-year technology services industry — a flagship of the nation’s economic surge in the past decade — will see even brighter days or become a back-office also-ran to more sophisticated tech companies in the West.

So, based on that description, this isn’t some one-off project or a single company looking to extend its reach: this is a broad-based initiative that puts many tens of billions of dollars up for grabs. This is how it’s going to be; this is, in fact, what’s already happening. Here’s why:

Products continue to be enormously important, but services and industry knowledge and expertise have become the levers with which CIOs and other business leaders are transforming the world.IBM (NYSE: IBM)’s and Accenture are long-established powerhouses, HP (NYSE: HPQ) is getting there via its EDS (NYSE: EDS) acquisition 18 months ago, and Dell (Dell) (Perot Systems) and Xerox (NYSE: XRX) (ACS) are looking to raise the value of what they do by coming closer to offering end-to-end services.

In the Journal piece, Siddharth Pai of the well-known outsourcing-advisory firm TPI said, “The Indians still aren’t top of mind when it comes to that high-value work. To bump back up to the 30% growth range they need to transform their businesses.”

And Infosys executive Amitabh Chaudry said that while the challenge of taking on major infrastructure deals and even huge parts of IT organizations is steep, progress is being made. “The mindset required for how to run it and price it is very different. We’re learning along the way.”

One thing that’s beyond question is that the top Indian firms will show massive commitment to making this transition rapidly and effectively. What’s not so clear is whether those companies will have to do so under some competitive restraints that could be imposed by the the Obama administration. The president has talked on a number of occasions about his intention to “protect our jobs,” although he’s been far from clear on just how he would define “our jobs” in a global economy.

IBM has 70% of its employees based outside the U.S.; are those “our jobs”? Oracle has about two-thirds of its workforce outside the U.S., and for Microsoft the number is more than 40%. “Our jobs”? What does that mean anymore?

For the past couple of years, the big Indian IT-services companies have been making some so-so efforts–not exactly aggressive, and not exactly strategic — to open up some facilities around the U.S. for various types of development and support work. Those were undertaken to support their traditional model of doing software work and development projects, rather than full-scale outsourcing mega-projects such as the kinds they’re looking for now.

They’ll need to hire workers based in the U.S. to handle projects based in the U.S., and I doubt the White House will try to interfere with that. I only hope they are allowed to compete level footing with U.S. firms, and are not saddled with any sort of tariff penalties—because those penalties will ultimately be felt by potential customers and prospects who are now eagerly awaiting the full arrival of several more well-heeled and aggressive suppliers from which to choose.

Meanwhile, those CIOs would do well to make this extended competition about much more than just price-arbitrage. While looking for every fair cost advantage is essential, the real value to be gained by the larger pool of competitors is innovation: which of the companies bidding for CIOs’ business have special expertise in your industry? Which have special technological expertise in the area of greatest concern to you? Which have the demonstrated the ability to optimize business processes that will get you closer to your customers, allow you to move at the speed of the markets in which you operate, and redefine your value proposition based on what your customers want instead of just on what you happen to be selling?

The prospect of great new ideas and capabilities pouring into the enterprise IT space has enormous potential, and we can only hope that politicians will resist their recent tendencies to muddle. “Our jobs” will be much safer if the free market is left to fend for itself, if competition is open to all with great ideas and initiative, and customers have full freedom to choose the partners whose capabilities best match their needs.

Source: http://www.informationweek.com/news/global-cio/interviews/showArticle.jhtml?articleID=220600197