Perot Systems to be purchased by Dell

Perot's software may prove lucrative for Dell

In the face of slumping sales figures, Dell has announced that it will purchase software manufacturer Perot Systems Corporation for $3.9 billion, about 68 percent more than its market value. The move could help boost revenue, but analysts are weighing in on the risks inherent in the deal.

One of the problems with the deal is Dell's relative inexperience with the service sector of the IT industry, which some feel could complicate Dell's restructuring efforts considerably. Nonetheless, Perot specializes in healthcare records software, and its clientele - hospitals, clinics and insurance companies across the country, among others - are what Dell is interested in.

Legislation to extend government-sponsored health insurance is currently being considered; if it passes, the influx of new patients could mean big business for companies like Perot, which would justify Dell's gamble in purchasing it at such a high price.

While the success of Dell's gamble hinges in large part on the passage of healthcare reforms, Dell may yet see a windfall by simply expanding its software services arm. Competitors IBM and Hewlett-Packard both hold large private and government service contracts, which have helped them stay out of the red during times when their hardware sales have dipped.

Whether Dell wins or loses, the purchase shows plainly the value of software-oriented IT companies, which in turn may be a statement on the unwavering need for systems administrators.