Dell sheds services business ahead of EMC acquisition

Business deal

Dell is selling off its services vision to NTT Data for $3 billion (2 billion) to help fund its $67 billion (46.5 billion) takeover of EMC.

Dell bought Perot Systems, which forms the bedrock of the services division, in 2009 for $3.9 billion, meaning the Austin-based firm is making a loss on the sale. However, the merger with EMC is expensive and Dell consequently needs the money.

The move also differentiates Dell from its competitors, notably IBM and Hewlett-Packard Enterprise, which have been talking up their service provider credentials over the past 12 months.

When Dell first announced the merger in October 2015, it said the acquisition would be completed between May and October 2016. It is now thought the closing announcement could be made at EMC World, which takes place between 2 - 5 May this year. Michael Dell is one of the keynote speakers on the first day of the conference.

From the point of view of NTT Data, which is owned by Japanese telco NTT, the acquisition of Dell Services will provide a significant inroad into the North American market.

NTT Data CEO Joen McCain said: Dell Services is a well-run business and we believe its employee base, long-standing client relationships and the mix of long-term and project-based work will enhance our portfolio."

"We are confident this transaction will be positive for clients, employees and shareholders, and will advance our collective vision to be an innovative partner for our clients," he added.

Jane McCallion
Managing Editor

Jane McCallion is ITPro's Managing Editor, specializing in data centers and enterprise IT infrastructure. Before becoming Managing Editor, she held the role of Deputy Editor and, prior to that, Features Editor, managing a pool of freelance and internal writers, while continuing to specialize in enterprise IT infrastructure, and business strategy.

Prior to joining ITPro, Jane was a freelance business journalist writing as both Jane McCallion and Jane Bordenave for titles such as European CEO, World Finance, and Business Excellence Magazine.