year ago today, Dell launched a new phase in the
company's history with the creation of Dell Services combining the capabilities
of Perot Systems and Dell. This combination broadened Dell's portfolio of
services capabilities and offerings, deepened domain knowledge in several key
industries globally, and led to new opportunities for Dell to deliver total
solutions that help our customers succeed.
Prior to becoming part of Dell, Perot Systems had annual revenue
of approximately $2.6 billion, generated primarily from business process
outsourcing, consulting, applications development and management, and IT
infrastructure outsourcing. Dell's pre-existing services-related revenue
of $5.1 billion came primarily from "close-to-the-box" areas of hardware
support, managed services and IT consulting.
The integration of the two companies is going well. As we
combined the two organizations, we committed to delivering $300 million in cost
synergies and now expect to exceed our year-one target of $100 million in
savings. In the first quarter of FY11, Dell Services implemented a new
business structure that aligns with Dell's vertical BU organizations.
This organizational change optimizes collaboration and engagement across Dell
and positions Dell Services for growth. In Q2, we launched a program to
migrate approximately 23,000 legacy Perot Systems users to a common network and
set of applications. We continue to streamline infrastructure, and other
support processes and functions, all of which continues to track to our
integration plan and timeline.
Today, the new Dell Services represents:
The new Dell Services is one of only four integrated hardware and
service providers in the world, and yet nimble enough to embrace change in the
industry. We see the industry moving to shorter contract lengths and
smaller project engagements with customers demanding more flexibility and
faster ROI from their technology providers. These trends bode well for
Dell Services, and customers have responded enthusiastically to the combination
and Dell's greatly enhanced industry domain knowledge and deep technology
Among numerous significant developments:
Across all of Dell, our teams are working hard to expand our
enterprise solutions and services business by delivering open, capable and
affordable solutions that help customers succeed. The creation of Dell
Services was a vital element towards that goal.
Look for more from us regarding Dell Services on our earnings
call. As always, we appreciate your comments.