Dell may retain Perot Systems staff

Dell India will look to retain almost all of Perot System’s employees and will not be in a hurry to sink the Perot Systems brand, thou gh the personal computer giant has entered into an agreement to acquire the latter, after searching for a services firm for years.

An official with Dell India told Financial Chronicle on condition of anonymity that Perot would remain a separate brand until such time that the acquisition was complete and the results start showing. Then it will be known as Dell’s services unit. It is not immediately clear as to how long that process will take, but indications are that it could be completed by January next year.

Officially, Dell India is not willing to share more details. “It’s too early for us to comment on what it means for the company in India,” said Dell India’s head of corporate communications, Minari Shah.

The official whom FC spoke to in Dell India said the company is on the lookout for more acquisitions in the services space. “A few of the Indian IT firms are on the radar,” the person said.

“Other big players namely IBM and HP had moved into other higher margin businesses such as services and software. There was pressure on Dell to get out of this pure hardware giant portfolio. As you know, the margins in the hardware business was getting tough to maintain,” the person added.

Dell has close to 12,000 people in India, spread across four segments, research & development, marketing, domestic sales and business process outsourcing. The company’s BPO centres are in four cities—Chandigarh, Hyderabad, Bangalore and Gurgaon.

Perot Systems has over 8,000 employees across six centres in India. The Bangalore, Noida and Pune centres cater to the application development and infrastructure services. Hyderabad, with around 80-100 people, offers engineering services. The company’s BPO operations are run from Chennai and Coimbatore and consists of over 4,000 people.

But it is not clear whether everyone of them would be retained when the integration gets completed. “It’s too early for us to say anything on that front,” said Minari Shah.

However, insiders felt that all Perots Systems employees will be retained. Rajiv Mehta, senior IT analyst with India Infoline, told FC that it remains to be seen what kind of advantage Dell will enjoy in India with this acquisition.

“Perot is a small firm. It employs only 8,000 people and that’s not a large scale operation,” he said. Dell’s vice-president (product marketing) Sally Stevens told Financial Chronicle that Dell is fashioning itself into a solutions provider from an end-to-end standpoint. “We have been able to help our customers save a lot of money during the downturn with our product offerings,” she said.

Dell’s global commercial customer base spans large corporations, government agencies, healthcare pro viders, educational institutions and small and medium enterprises.