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Potential Buyers for Dell’s Perot Systems

Who will potentially buy Perot Systems from Dell? There are at least three potential suitors for Dell’s IT services business. So far, valuation appears to be a stumbling block for a potential deal. But if a Perot Systems sale occurs, the big winners could be Dell and EMC channel partners seeking to work more closely with the companies on midmarket and enterprise-scale engagements.

Dell is striving to strengthen its balance sheet ahead of the proposed EMC and VMware buyout — a $67 billion deal that’s expected to close in mid-2016. In addition to trying to sell Perot Systems, Dell reportedly is trying to sell its SonicWall AppAssure and Quest Software businesses. The company also is preparing to launch an IPO for SecureWorks, a managed security service provider.

Potential Perot Systems Buyers

Among the potential buyers for the Perot Systems business: Atos, a French IT outsourcing firm; Genpact, an IT services firm based in New York that was formerly part of GE; and CGI, a Canadian IT firm, according to Re/code.

Another potential bidder, Tata Consultancy Services (TCS) apparently backed out of the potential bidding because of valuation concerns, according to The Economic Times.

Dell apparently has been trying to sell Perot Systems for $5 billion or more, but the negotiations have apparently dragged on longer than expected because bidders aren’t willing to open their wallets quite that wide, according to Reuters.

Dell acquired Perot Systems for $3.9 billion in 2009. But Michael Dell’s enterprise IT consulting push emerged more than a decade after IBM Global Services captured mind share and market share in that market. Plus, many enterprises and midmarket customers have now shifted their IT consulting spending toward cloud-oriented services rather than long-term enterprise IT projects.

A lengthy list of IT consulting firms have since pivoted toward the cloud. A prime example involves Accenture’s buyout of Cloud Sherpas, a leading provider of Google Apps, Salesforce and ServiceNow consulting services.

Dell, EMC, VMware Partners: Upside, Downside

Dell’s effort to sell off selected assets could have potential upside — and downside — for partners.

On the one hand, selling off Perot Systems would make Dell, EMC and VMware more dependent on channel partners that have midmarket and enterprise skill sets.

On the other hand, Dell assets like AppAsure, SonicWall and Quest Software have close followings among channel partners that support small and midmarket customers. Uncertainty around those assets — and how they are owned and managed — could alienate some Dell channel partners.

ChannelE2E has not independently confirmed that Dell plans to sell Perot Systems, AppAssure, SonicWall and/or Quest Software.

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