Perot Systems

» see perotsystems.com as it lived, on the wayback machine

~ the goodbye ~

Perot Systems sold to hospital groups and state governments. Its product was a contract: hand us your medical records department or your claims processing and we will run it cheaper, in a building you do not own, with people you do not employ. There is no consumer version of that, no login page, nothing anybody outside a procurement department ever formed an opinion about. It is a company whose entire customer list fits inside one country's institutional sector. Most people only ever touched it by being admitted to a hospital that had outsourced its paperwork.

H. Ross Perot and eight associates founded it in June 1988 in Plano, Texas, four years after Perot sold Electronic Data Systems to General Motors. EDS, which Perot had started in 1962, had spent two decades proving that a company would rather rent a data processing department than staff one, and Perot Systems was that same bet placed again with twenty years of hindsight. The strongest practice turned out to be health care, specifically the unglamorous work of digitizing and automating medical records at a point when American hospitals still ran on paper charts and film jackets.

It worked. By 2008 the company was a Fortune 1000 corporation turning over $2.8 billion a year, with more than 23,000 people in offices across 25 countries, India and Mexico included. Fortune put it in the top five of its Most Admired Companies list for IT services for the third year running. The ending was an acquisition rather than a failure. Dell announced on 21 September 2009 that it would buy Perot Systems for about $3.9 billion, $30 a share in cash, a 61 percent premium on the previous close.

~ the chronicle ~

~ the surname in the logo ~

Naming a company after yourself works until you run for president. Perot stood in 1992 and again in 1996, and by 1996 his family owned about 40 percent of Perot Systems while he was barely involved in the daily business. Inside the company the executives were openly split on whether the Perot name brought in more work than the Perot politics drove away, and they discussed renaming the whole thing.

Nobody did it. The name stayed, which meant the firm spent the 1990s carrying a brand that was simultaneously shorthand for American business success and shorthand for a particular set of positions on trade and deficits that a procurement officer might or might not share. The upside is hard to measure and the downside is too. What is measurable is that the name survived every internal discussion about removing it, and then came off in November 2009 in one line of somebody else's press release.

Perot himself died on 9 July 2019, just under ten years after the sale. By then the company he started in 1988 had been a Dell division, then a Japanese-owned division, and former Perot and Dell staff had founded a Texas IT firm called Guide IT in 2013 with backing from his son.

~ 30 dollars a share ~

The tender offer closed on 3 November 2009 with 108,774,629 shares tendered, about 87.7 percent of the stock. Dell took all of it and announced the new unit the same week: Dell Services, led by Perot's own chief executive Peter Altabef, reporting to Michael Dell, with more than 41,000 services staff once Dell's existing people were folded in. That was the day Perot Systems ceased to be a company and became a division of a hardware maker that needed margin from somewhere else.

Dell closed the sale of Dell Services to NTT Data on 2 November 2016 for $3.055 billion, roughly what it had paid for Perot Systems alone, one day short of seven years after the tender offer closed. Accounts from people who were there put the problem down to a culture clash and the steady departure of client-facing staff to the customers themselves. The outsourcing contract Perot had spent his career selling outlived both of the companies he built to sell it.

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