Dell and Perot Names A Welcome Marriage
Wasn't it inevitable that the Dell and Perot names would be married someday? Here are two Texan giants, leaders of their technology generations, doing "bidness" together for years, and finally tying the knot.
As a Texan who grew up writing about both the Perot family, real Dallas legends, and Michael Dell, whom I first interviewed when his company was still called PC's Limited, I consider the pairing only natural.
Don't underestimate the potential these companies have as a single business. While services offer higher margins, hardware remains an important business that can drive services sales and vice versa. Dell needed to increase the size of its services business and this deal accomplishes that.
The $3.9 billion Perot Systems purchase also better positions Dell as a cloud player as that market develops. The deal gives HP and IBM a much more potent competitor than existed yesterday.
While Dell was not in trouble, the company has lately seemed a bit dead in the water. Purchasing Perot Systems breathes new life into Dell's business and is doing it at about the right time.
This is not the first time Michael Dell has gone to the Perot camp for strategic help. Morton Meyerson, a top lieutenant to Ross Perot at Electronic Data Systems (EDS), helped run Dell for a time, bringing big customer street cred to a still-young Dell Computer Corp. (now Dell, Inc.).
Ross Perot, who founded both EDS and later Perot Systems, is a true technology legend, but of a different time. EDS was a big systems company that, in its heyday, helped define enterprise computing.
Michael Dell is, of course, better known to PC World readers. His company helped define the PC generation and continues to do so. Starting his company while still in college, Dell was a legend before he turned 30.
It speaks well of the deal that Perot management will remain in place. I am not usually bullish on tech company mergers. Most of them have gone flat. However, this is a marriage of two companies that do not substantially overlap and whose Texan leaders know and respect one another.
If any tech merger can work, this one should, and I believe it will.