Summary
Dell, buying into the notion that hardware is now a commodity and they have already optimized that business, believes they need to diversify. So they buy a large business/technology consulting firm. Do they now bring any more value to the Perot business?
Analysis
How about the notion that business/technology consulting firms are a commodity. If you closed your eyes, would you really know if Perot or EDS or Accenture or another dozen of so firms were working on your project? The staff, methodology, pricing is pretty much the same. Its not until you use off-shore staff that the price differentiates, but all of them can bring that capability now.
CIOs of large companies hire one firm or the other based on relationships, not skill sets. There are small boutique firms that have established niches in certain geographic or functional areas, other than that its actually pretty standard.
On the hardware side, I think there is more differentiation these days in products, options, service, and to some extent pricing. I believe Dell has shown some very interesting competitive improvements, for example the Equallogic Storage Arrays are different technology and price-wise than EMC, IBM, or HP.
I'm not sure what Dell brings to Perot or vice-a-versa. Bigger does not necessarily mean synergistic.
Howard Bruck consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
