Wednesday, 17 December 2008

Dell to make big acquisition? Possibly in IT Services?

(By Richard Holway) The New York Times (15th Dec 08) carries an interview – Dell Trails its rivals in the Worst of Times - with Michael Dell. “Wall Street analysts speculate that Dell was gearing up to make the largest acquisition in company history”, going onto say there are “any number of acquisition possibilities: servers and storage systems, software and services.”

I’ve used Dell hardware in my office for ten years now – since I reluctantly gave up on Apple (although I still use Apple for all the fun bits of my life). The problem is that the Dell model is not really relevant anymore. ‘Reinvention’ is extremely difficult. The history of Hardware companies buying IT Services companies is littered with failure.

Mind you my view of the future is changing. I think the world will split to two camps.

1 - The ‘Services-led’ sale - embracing Consultancy and Services with best-of-breed product from whatever supplier. Accenture, Capgemini, CSC would be in this camp.

2 – The ‘Product-led’ sale - embracing proprietary hardware and/or application) where the Services are ‘pulled though’. IBM, HP (with EDS) , Fujitsu and (if they do an acquisition) Dell would be in this camp.

‘Service-led’ sales may be the preferred option in many developed markets (like US and UK) but, as I have said in previous posts, the Product-led sale is the preferred model in the all-important developing world.

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