10 Things You Don't Know About Perot Systems

A New Chapter For Perot Systems

Perot Systems was a fixture in the health-care and government outsourcing space for more than two decades before being gobbled up by Dell in 2009.

Now, Perot Systems, founded by twice candidate for U.S. president H. Ross Perot, appears poised to get another corporate parent as Dell looks to shed assets in preparation for its acquisition of EMC.

Re/code reported Tuesday that Atos, a French IT outsourcing firm, is now the front-runner in the bidding for Perot, and is offering $4.2 billion to $4.3 billion for the business.

With a change in ownership apparently imminent, let's take a look back at some of the most interesting or unusual things Perot Systems and its leaders have been involved in over the past 28 years.

10. Leader Of Perot's Integration With Dell Attempts To Turn Around Another VAR

Longtime Perot Systems executive Peter Altabef (pictured) took over as CEO for all of Dell Services after the acquisition closed in early 2010, but left a year later once the integration work was done.

In early 2013, Altabef took the helm at Columbia, Md.-based Micros Systems, No. 29 on the CRN 2014 Solution Provider 500, and steered the company into Oracle's arms by way of a $5.3 billion acquisition in June 2014.

The beginning of Altabef's third act -- as CEO of Unisys Corp., No. 19 on the CRN 2015 SP 500 -- has been challenging, with the Blue Bell, Pa.-based company racking up $111 million of losses and a 9 percent sales decline during his first nine months on the job.

9. Perot Hired An Ex-CIA Agent Involved In Contentious Investigations

Perot Systems' March 2006 hiring of David Szady to lead a charge into the counterintelligence market raised eyebrows given his ties to controversial probes.

Szady was part of a 2005 investigation into pro-Israel lobbying group AIPAC (the American Israel Public Affairs Committee) given his role as chief of the CIA's counterespionage group. That probe resulted in the arrest of two AIPAC members on suspicion of receiving classified information from a Pentagon analyst; some Jewish groups said the charges were trumped up.

Szady was also involved in an investigation that led to the arrest of former FBI agent Robert Hanssen on charges of spying for the former Soviet Union; critics said Szady was single-mindedly focused on the wrong man.

8. Perot Was Recognized As America's Top Health-Care Outsourcing Provider

Perot Systems was ranked the highest in overall performance by the more than 500 health-care providers participating in Datamonitor's Black Book of Outsourcing 2009 Survey focused on health-care IT.

Datamonitor said Perot was praised by customers as the outsourcing partner with the greatest impact on technology transition and the strongest ability to deliver infrastructure improvements as well as application and business process support services.

In addition to the highest overall ranking, Perot received top marks in categories including application development and maintenance, revenue cycle management, clinical data initiatives, training, reliability, breadth of offerings, flexible pricing, data security and backup, integration and interfaces, and best of breed technology.

7. Perot Was Accused Of Helping Gouge Electricity Customers In California

Perot Systems was charged by California officials with helping energy firms gouge electricity customers in seven lawsuits filed from June 2002 to August 2002.

Perot had been hired to help run the computers of two power exchanges in California, and state officials said the company tried to sell its inside knowledge of the state's electric market to energy companies. Specifically, the suits claim that Perot's regulatory filings didn't accurately discuss the company's California activities.

The company said at the time that the lawsuits were without merit as the information was publicly available. Nonetheless, Perot said it spent $3.5 million through June 30, 2002, investigating its role in the California energy crisis.

6. Perot Was Named One Of Fortune's Most Admired Companies In America

As a top-five finisher in its final three years as an independent company, Perot Systems was named one of Fortune Magazine's Most Admired Companies in America for IT Services in 2008.

Perot came in fifth on that list, trailing just Accenture, CACI, Electronic Data Systems (EDS) -- which is now part of HP -- and SAIC. Perot was ranked second on the list in both 2006 and 2007, behind only Accenture.

Fortune's ratings were based on eight criteria, ranging from investment value and quality of products/services to innovation and quality of management. Perot performed best in the people management category in 2008, earning fourth place.

5. Though He Was An Ardent Protectionist, Perot's Company Outsourced Jobs to Mexico

When H. Ross Perot ran for president in 1992, he argued stridently against the North American Free Trade Agreement and warned of the "giant sucking sound" of American jobs heading south to Mexico should NAFTA be ratified.

But in November 2006, Perot's outsourcing company -- where he still served as chairman emeritus -- announced plans to hire 270 workers in Mexico who would be responsible for providing IT support to American businesses. The new service center, based in Guadalajara, would provide a range of outsourced services such as desktop support, infrastructure management and engineering services.

Ross Perot's anti-NAFTA rhetoric made him unpopular in the early 1990s in Mexico, where many had high hopes for the agreement.

4. Perot Introduced Curbside Check-In And Centralized Tracking For Rental Cars

In February 1992, Perot Systems notched its first significant European customer -- Europcar -- which chose the then-small outsourcing firm over 20 competitors, including EDS, IBM and AT&T.

Perot was given responsibility for Europcar's entire IT system from research to daily production, and helped develop Greenway, an open Unix-Oracle system used at 2,500 simultaneously connected terminals. This paved the way for Perot to develop curbside check-in and centralized fleet tracking.

Things went south, however, after several major network failures and disk crashes cost Europcar "a six-figure sum a day." This prompted Europcar to take control of its own hardware and software systems in August 1998 and hand control of computer personnel over to Capgemini.

3. Shareholders Sued To Block Dell's Acquisition Of Perot

An October 2009 lawsuit filed by a group of Perot Systems shareholders alleges that Perot did not explore all possible buyers because of buddy-buddy relationships between executives of Dell and Perot.

According to the suit, filed by the Booth Family Trust, Perot Chairman Ross Perot Jr. had several discussions about a potential sale directly with Dell board member Thomas Luce III -- with whom Perot Jr. had a longstanding relationship -- rather than forming a special committee of independent directors to negotiate and evaluate an offer.

"In order to meet their fiduciary duties, the Individual Defendants [Perot board members] are obligated to explore transactions that will maximize shareholder value, not structure a preferential deal for themselves," the suit said.

2. Perot Was The Largest Acquisition In Dell's History ... Until EMC Bid

Dell's $3.9 billion offer to buy Perot Systems in September 2009 was the biggest in the 31-year history of the Round Rock, Texas-based IT giant until October's $67 billion bid for EMC.

When Dell acquired Perot Systems, the company had more than 23,000 associates and annual sales of $2.8 billion, good for No. 51 on CRN's 2009 VAR 500 list.

Dell Services, which includes Perot sales, is now No. 9 on the CRN 2015 Solution Provider 500. In Dell's fiscal year 2012, ended Feb. 1, 2013, Dell Services accounted for $8.4 billion in annual sales.

The deal was intended to significantly expand Dell's services offerings and better position the then-second-largest global computer maker to compete with Hewlett-Packard's and IBM's services units.

Dell offered to buy Perot Systems for $30 per share, a 61 percent premium over Perot's previous closing price.

1. Perot Systems Was Ross Perot's Second Act In IT

Former presidential candidate H. Ross Perot altered the IT landscape by founding and growing not one, but two reseller giants.

When he was just 32, Perot founded Electronic Data Systems (EDS) to provide data processing services to large corporations, supporting everything from banks to travel services to the U.S. government.

Perot sold a controlling interest in EDS to General Motors in 1984 for $2.4 billion and was ousted from the company's board two years later after a feud with GM Chairman Roger Smith.

Perot's termination agreement allowed him to hire up to 200 EDS executives after 18 months for any new firm he would start. Eighteen months later, Perot and eight associates founded Perot Systems.