Dell Services Focusing on Simple, Effective, Best-Value IT Solutions for Customers

Dell leaders today will tell investors and others that the company’s integration of Perot Systems into a broader Dell Services organization is progressing well, and will benefit customers by making information-technology solutions easier to access and simpler to manage.

“Dell now has a comprehensive and growing set of leading solutions that meet customer needs, so they can manage their IT most efficiently,” said Peter Altabef, president of Dell Services. “The Dell Services and Perot heritage of strong customer focus positions us extremely well to help customers of all types and sizes use IT to solve problems and derive the best value for their technology investments.”

According to Mr. Altabef, Dell Services is focused on combining its knowledge of different industries and requirements, together with Dell’s technology-platform expertise, to help customers succeed in:

  • Reducing labor requirements by increasing automation;
  • Applying appropriate “IT-as-a-service” models;
  • Performing IT-related tasks—or having them done by Dell—remotely wherever possible; and
  • Increasingly doing all of this based on technology industry standards.

Dell acquired Perot Systems on Nov. 3, in the process extending the reach of Dell Services into consulting, applications, business-process outsourcing and hosting. The combination immediately expanded Dell’s already significant range of managed and modular services, and makes all existing and future capabilities available to Dell’s large global customer base.

Mr. Altabef; Brian Gladden, Dell’s chief financial officer; Steve Schuckenbrock, president, Large Enterprises; and Paul Bell, president, Public, are to update investors and equity analysts on the progress of the integration in an 8 a.m. EST conference call today.

Dell will consolidate financial results from Perot Systems beginning with Dell’s fiscal fourth quarter, which ends Jan. 29. The company expects Q4 revenue from the former Perot Systems business to be similar to what Perot reported in its third quarter, though there is typically some seasonal softness in the fourth quarter.

Dell expects to recognize an estimated pretax expense of $120-130 million in the fourth quarter, and about $20-25 million per quarter throughout fiscal year 2011, for costs related to the Perot Systems acquisition. Dell anticipates amortization of intangibles related to the acquisition will be about $40-50 million in the fourth quarter as well as in each quarter of fiscal year 2011, in addition to the $40 million in amortization Dell typically reports in a quarter.

Separately, Dell said it will incur combined, pretax organizational-effectiveness expenses of $80-120 million in the fourth quarter resulting from the transfer of its Poland manufacturing facility, together with additional optimization of facilities, products and processes.

Additional information about the integration of Perot Systems and separate organizational effectiveness is available in the conference presentation. Dell plans to report fourth-quarter financial results on Feb. 18.



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