Outsourcing Update: Xerox Buys Outsourcer ACS -


On the heels of Dell’s purchase of Perot Systems, Xerox announced that it was purchasing Affiliated Computer Systems (ACS) for $6.4B. Dell just agreed to buy Perot Systems for $3.9B. Now that 3 major hardware companies have purchased outsourcing vendors the outsourcing/sale of hardware market will get more interesting. ACS claims it is the “world’s largest diversified business process outsourcing (BPO) firm, ACS is a $6.5 billion company with revenue growth of 6 percent and new business signings of $1 billion in annual recurring revenue during its fiscal 2009.”

Other Developments with Perot Systems

Apparently not everyone at Perot Systems thinks the purchase by Dell is so wonderful as some Perot Systems’ shareholders filed suit to stop the sale. In the meantime Perot Systems announced that it will acquire BearingPoint China Consulting and made the following statement:

BearingPoint China Consulting has earned numerous industry awards. In 2008, the China Software Association and ERP ranked the firm among the "Top 10 IT Consulting Firms" in China, and named CEO Machan among the "Top 10 People of the Year in the IT Industry" in China. The firm also was chosen as "Most Trusted Consulting Firm" in 2007 by the China Enterprise Confederation.

Of course this acquisition is subject to U.S. Bankruptcy Court approval as well as that of the Chinese government. It seems that Perot Systems is not sitting idle while the Dell acquisition is taking place.

Where are We Going? Proprietary Systems?

What’s going on in the outsourcing world with these major acquisitions? One answer might be that outsourcing vendors will now try to tie their customers to them more closely by creating special hardware/software systems that make leaving more difficult and expensive. Remember a year ago that Oracle and HP announced that specialized hardware systems for Oracle databases. Sounds a lot like the old minicomputer days when every hardware manufacturer had a proprietary operating system and as a result customers found it cost prohibitive to change vendors...hard to image in today’s world of Windows Servers and Linux. Time will tell.

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