Dell's sale of Service Business to NTT Data will narrow its debts

Japan-based NTT Data Corp agreed and announced on Monday to buy Dell Inc’s former Perot Systems, its Plano-based information technology services for $3.06 billion to expand its horizons overseas and bolster its service in places like North-America. Dell had acquired Perot Systems in 2009 for $3.9 billion. The sale is expected to help fund Dell’s $67 billion acquisition of Massachusetts-based EMC, a data storage provider which happened in October last year and will reduce approximately $50 billion of debt incurred as according to ratings agency Fitch Ratings. According to Reuters and The New York Post, Dell hit a hurdle in February in the financial markets and posted a steeply higher loss in its most recent fiscal year, ended Jan. 29, according to its latest filing with the US Securities and Exchange Commission. In a filing, net losses at Dell-owned Secure Works increased by 88 percent to $72.4 million, while revenue rose to $340 million, up 30 percent.  

Growing tides, overseas

The acquisition would be by far NTT Data’s largest, creating a bigger foothold in the United States, where it is looking to expand in healthcare IT, insurance and financial services consulting to counter sluggish economic growth at home. Dell Services has been consistent in winning deals in the application development and infrastructure management areas such as Dubai Health Authority (DHA) and Blue Cross & Blue Shield of Rhode Island (BCBSRI). It also entered agreements with marquee brands such as American Express, Bombardier, Harvard Pilgrim Health Care, Markit and Thermo Fisher Scientific. John McCain, Chief Executive of NTT Data, said, “The deal with Dell is to close in about three or four months. Dell Services’ office at 2300 W. Plano Parkway will become the new headquarters for NTT Data in North America and NTT Data employees housed in the current Granite Parkway headquarters will move after that lease is up.” Once the transaction is completed clients and employees of Dell Services and NTT Data benefit facilities that come with the agreement. That includes a significant expansion of BPO capabilities, particularly in healthcare and insurance industries, increased infrastructure platform, with the Dell Services data centers in the US, UK, and Australia joining NTT’s 230 data centers around the globe. Also expanded technology resources will be able to offer next-generation application and business process services to help clients leverage IT to enhance business performance and outcomes. In India, NTT Data has around 20,000 employees and Dell Services about 13,000. Which will potentially double its presence in India with an employee base of over 30,000.

Abhinav Mohapatra

An author who has a keen interest for the ‘off-beat’ <!--more-->An author who has a keen interest for the ‘off-beat’, he has covered and explored multiple facets of the marketing, advertising

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