Dell Looks to Package Hardware With Services

Dell plans to offer packages of software and services around its hardware in a bid to increase sales, a company executive said on Friday.

The company is already offering a software, hardware and services package for small to medium-size U.S. hospitals that are developing electronic health care records systems, said James A. Champy, chairman of Dell Services' Consulting Practice. Dell Services now sees an opportunity to expand this strategy to other niche markets, he added.

"We will provide Dell hardware, provision the hardware, install the software and run it as a package if the client wants us to," Champy said.

CIOs have found it too expensive to selectively pick best-of-breed pieces of technology. Customers now want a combination of software, services and hardware at a lower cost, Champy said. "If the deal is priced well, they will buy it," he said.

For regular services contracts, Dell will still sell services if a customer wants different hardware, Champy said. However, for the software, hardware and services packages, customers must buy the Dell hardware, he said.

When announcing its plan in September to buy Perot Systems for US$3.9 billion, Dell said one of it its objectives was to supply its computers to even more Perot customers.

Perot, which is now part of Dell's global services business, derived a majority of its revenue from the health care and government markets. Dell Services now plans to grow its business in other markets like banking and financial services, Champy said. The share of these vertical markets in overall services revenue will not change dramatically in the next few years, but the scale of each of the businesses will go up, he said.

Many of its services will come from low-cost locations like India where talent is easily available, Champy said. Of the about 42,000 staff currently in Dell Services, about 14,000 are in India. The company also has other offshore centers in the Philippines, Romania and Mexico.

"We see India both as an undeveloped market for us from the services side and also as a platform to support our business growth in Asia and other regions," Champy said.

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