You probably know the bare-bones history of the personal computer: The business was IBM’s to dominate, but it decided to outsource the guts of the machine—the microprocessor and the operating system—to Intel and Microsoft. Those two companies sucked up most of the profits of the 1990s PC boom, while Dell became the dominant PC manufacturer by outsourcing just about everything but final assembly. IBM eventually got out of the PC business entirely, reinventing itself as a giant business consulting firm that happened to sell some software and hardware. (Or, as it says on IBM’s website, “helping clients succeed in delivering business value by becoming more innovative, efficient and competitive through the use of business insight and information technology (IT) solutions.”)
Well, things haven’t been going so well for Dell over the past decade. And now, with the decision to buy IT consultants Perot Systems, it has decided it’s time to become more like IBM—that is, a vendor of solutions rather than just products. Perot systems was of course founded by H. Ross Perot. His previous company, EDS, is now part of HP, another tech product maker that has migrated to provider of solutions.
For me the deal raises two big questions:
1) Isn’t Dell kinda late to the game here?
2) With all these companies making all this money providing IT solutions, why hasn’t IT been solved yet?