Gartner approves Dell's ACS acquisition

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Gartner approves Dell's ACS acquisition

Purchase will extend PC giant's service business.

Analysts have welcomed Dell's recent purchase of UK-based IT services provider ACS.

According to Gartner, the deal enhances Dell's service resources and competency in infrastructure consulting, especially application packaging.

Dell announced on 14 November that it had acquired ACS (UK) ltd, a service provider based in Glasgow employing 150 workers in the UK and 50 in India.

The firm provides application packaging and consulting services focused on Microsoft, VMware and RSA Security.

Gartner research vice president Alan MacNeela explained that the ACS application packaging business will be integrated into Dell's managed service business, and its consulting business into Dell's professional service business.

Dell plans to develop the application packaging capabilities into a global offering within its service portfolio.

"The acquisition enhances Dell's services resources in the UK and improves its competencies, especially in application packaging services," said MacNeela in a recently published briefing paper.

"Acquiring ACS extends Dell's service capabilities and supports its aggressive growth plans for its services business."

Dell has built a US$5 billion service business over the past five years, primarily in product-related services such as roll out, maintenance and support.

As the company's enterprise-level product portfolio has grown, its service capabilities have had to evolve to meet the needs of more-complex enterprise-level requirements, according to Gartner.

MacNeela explained that Dell has grown its professional and managed service business organically.

The division directly employs about 450 pre-sales staff in Europe and has almost 60 approved partners for the delivery of enterprise-level professional services.

"ACS' application packaging competencies will enhance and extend Dell's custom factory integration offering which provides image management services and has experienced some programme problems in the past," said MacNeela.

"The acquisition also extends Dell's IT consulting capabilities, especially its design and strategy competencies where it has lacked depth and breadth of experience."

However, the analyst warned that Dell has limited experience in acquisitions. The company acquired high-end storage vendor ConvergeNet Technologies in 1999, IT services provider Plural in 2002 and gaming PC vendor Alienware in May 2006.

"Integrating ACS into Dell's highly specific culture may be especially challenging, given that leveraging the value and intellectual capital of a service business relies on retaining staff," said MacNeela.

Gartner believes that the successful integration of ACS may lead to Dell making further country or vertically focused acquisitions.

Gartner advises enterprises considering Dell as an application packaging service provider to satisfy themselves that the ACS and Dell models are "well-integrated".
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