Dell has made some brave claims about the opportunity for its services business following its acquisition of Perot Systems.
I have listed the claims with some comments from people I have spoken to. Please tell me what you think.
“1 – The IT industry remains fragmented with only 4 companies offering a set of integrated service offerings (IBM, HP, Fujitsu, and now Dell).
2 – Dell is powerfully positioned as one of the 10 largest IT services providers.
Industry comment: “In terms of pure services turnover maybe number 15-20 worldwide.”
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3 – From a customer point of view, we know IT budgets are pressured, and customers want technology that offers best value solutions.
4 – We want to help organisations innovate and focus on strategic objectives while spending less on routine IT management.”
This is why Dell says it bought Perot:
“1 – Dell became an IT leader through highly efficient built-to-order solutions.
2 – Now, we want to do the same thing in services, reducing complexity and driving out inefficiencies across the service and support lifecycle.
3 – We believe that the new Dell Services (Dell’s legacy services organisation combined with Perot Systems – which we acquired last November) is big enough to be credible, yet nimble enough to lead a transformation in the services industry.”
This is what tell says about the merged services organisation:
“1 – We are a $7.5bn global services organisation with more than 42,000 employees.
2 – The organisation generates approximately three-quarters of its revenue from infrastructure and related support services 18% from applications and consulting services, and 7% from business process services.
3 – We serve the entire spectrum of potential clients, from large organisations to consumers.
4 – We see the combination of our solutions and teams creating enhanced growth opportunities through cross-selling opportunities as well as being presented the opportunity to participate in a broader range of sales activities
5 – This is a very exciting time and we’re stronger together
6 – We can fill out capabilities that neither company owned by itself
7 – Qualify for more RFPs and win more deals
8 – Sell more products and services at existing accounts.”
This is what Dell claims to do?
“1 – In addition to scale, the components that now form Dell Services have a comprehensive range of complementary strengths … and a consistent history of creating an award-winning customer experience.
2 – Together, the companies support nearly 15 million systems and manage over two million seats
3 – Consistently, Dell Perot Systems has ranked number one as healthcare IT contractor and number one by KLAS for Clinical Implementation Services
4 – The combination of solutions and teams from each company creates growth opportunities through cross-selling, but even more significantly presents the opportunity to participate in a broader range of sales activities.
5 – Dell Services offer best-in-class suite of intelligent, end-to-end services and business solutions to reduce IT complexity and lower costs
6 – From our knowledge of industry requirements, we then tailor industry-specific solutions that solve business problems and deliver the best value for the resources invested.
7 – The strength of our combined business model rests in several areas:
– Intense customer focus – committed to top customer success
– Domain knowledge – Industry expertise in healthcare, government, and large enterprise is a competitive advantage that allows us to add long-term value through industry-focused solutions
– Breadth of services – Integrated technologies, IT and business services, and industry-specific consulting are combined to create services that transform organizations
– Global delivery model – Modular services delivery put customers in control, allowing them to select only what they need, which means lower cost for customers
– Recurring revenue – Over $13 billion in annuity-like revenues.”
One industry commentator asked: “What is the definition of ‘integrated services.’ CSC, Atos, Logica, T-Systems, Siemens and many others offer these services.”
Is Dell underestimating the challenge?
What do you think?