What does the Dell/Perot merger mean?

Dell is to merge with Perot Systems, the US IT services businesses. Compared to IBM and HP, Dell hasn’t been regarded as a player in the IT services business, However, after HP’s $13billion acquisition of EDS, it was only a matter of time before Dell would move into services.

The deal could boost Dell’s enterprise credentials, particularly among those large businesses that have standardised on Dell hardware. Until now, the company has had very little track record in the software business, something the Perot deal promises to redress.

It will be interesting to see how Dell’s famous direct sales model works alongside the high value SI business. Its existing enterprise customers should be happy, as it demonstrates Dell’s committment to enterprise IT – but can low cost commodity IT hardware really fit alongside high value (ie expensive) IT services?