Dell Looks To Services Acquisitions

Dell

Kevin Rollins, Dell's president, said while lower-end "break-fix" solutions now may provide greater revenue and profit opportunities than higher-end engagements, the company is being driven to beef up its higher-end capabilities.

"Customers are now coming to us and saying, 'You should offer these [services,we would buy from Dell if you would get into them,' " Rollins told a gathering of financial analysts at Dell's annual spring analyst conference Thursday.

For about18 months, Dell has been working to build its services business into what it says will eventually be a $10 billion annual revenue stream. However, to date, it has relied greatly on third-party solution providers offering Dell-branded services.

"We're looking at how we might expand on Dell consulting capabilities beyond our partners," Rollins said. And while Dell will continue a path of organic growth in services as well as partnering, he said, "we will consider very, very selective and targeted acquisitions."

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Dell executives met with financial analysts a day after telling Wall Street it was on track for first-quarter revenue of $7.9 billion,slightly greater than it had expected,as well as a profit of 16 cents per share, which it had predicted.

Rollins and Dell Chief Financial Officer Jim Schneider told analysts that stronger-than-anticipated business in the United States was partly responsible for the company's performance.

Rollins also alluded to,without mentioning by name,turmoil surrounding the anticipated merger of competitors Compaq and Hewlett-Packard as key to new opportunities it has seen of late.

"[Customers are now turning to Dell as a source of stability for purchases," Rollins said. "They don't know what's going to happen to some of their other suppliers. There have been many, many opportunities that we were barred from at one point in time where we are now being invited in."