Dude, you’re getting a Perot…I mean a Dell

I love hitting on this nail as I think this merger is something that eventually will kill Dell but save their shareholders. Twenty years from now - assuming Dell will still be a brand name which I doubt – people will associate this company with IT services, not crappy netbooks or PCs whose name sounds like a villain from a bad sci-fi movie. In the end, I believe people will stick with the Perot name and the Dell particle will be dropped out. Or rather ejected.

Perot consultants are now told to promote Dell hardware because their earnings dropped 54% and my sources say Michael is going ballistic over the abysmal sales figures. And things won’t get any better for Dell in 2010.

Picture above was taken during an IT conference in Texas where Perot was sponsoring the event. I’m being told the poor Perot guy was promoting the Optiplex line of desktop, he must have felt like a total douche doing this. Why the hell am I doing this? Are the folks at EDS forced into similar humiliation? Do they have to dress in a 12-C outfit? Can I go work now?

Note to the Perot guy in the silly outfit: Dude, if you still care about your dignity, send me your resume. We’ll treat you right. Selling PCs is not a secret agenda at CGI.

What a surprise, Dell earnings down 54%

Really, no one saw that coming. Even me. Revenue was down 15 percent over the last year, and profits fell 54 percent. They blame weak pre-order demand for Windows 7 machine, which is typical of the denial phase when your business is going down. What does Michael think about this?

Founder and CEO Michael Dell said he expects companies to begin to order new PCs as part of the so-called "refresh" cycle starting early next year. "With an aging install base ... an accumulation of new technologies with hardware, software, virtualized clients...IT managers know they can't extend these assets forever," Dell said. "I think it will be a refresh that occurs over perhaps 18 months. I can't remember a time when a high percentage of (IT managers) skipped an entire operating system."

I agree, even we at CGI skipped over the Vista ditch, we’re still running XP with Explorer 6 and although it’s far from being perfect it works okay. Here’s the problem, you entire hardware business depends on how bad Microsoft screwed up with their aging Windows code. PCs are commodities, it doesn’t matter if you buy a Toshiba or an HP laptop anymore. It’s all the same shit.

Michael, if you were a smart man you would sell all your PC business to some nameless Chinese company, admit that Christmas is over, and focus exclusively on Perot, because that’s where the money is. Even IBM who is not the sharpest knife in the drawer understood that a long time ago, but you’re still fighting a war that is basically over. Michael, take a word of advice from that final scene in Chinatown

Jake Gittes: Why are you doing it? How much better can you eat? What could you buy that you can't already afford?

Noah Cross: The future, Mr. Gitts! The future.

Yes, the future. We at CGI understand this very well, IT service is where the future is, nobody cares about nuts and bolts anymore.

CGI is not for sale

When you’re a teenager girl and no one asks you out, either two things. Your physical appearance puts you in the Susan Boyle class and most people would guess that you live with approximately 12 cats, or you’re a total knockout and no one dare to ask you out because they know you’ll turn them down just by the way you grin.

In one very good interview I gave to the Financial Post recently, I said that CGI has never been approached for a merger because everyone knows we’re not for sale. I like to think that our more of the same (MoTS) strategy will ultimately deliver more value to the shareholder (me in particular) and we can grow this thing slowly without taking unnecessary risks.

I don’t want to be in a position where I have to sell knickknacks like Perot has to do now. Now that those guys report to a hardware outlet, guess what happens when Perot consultants do let’s say a strategic plan to overhaul your infrastructure. You’re right, they’ll want to shove a truckload of blade servers up your butt so that the local VP from Dell get a huge fucking bonus this year. Everyone has an agenda. Same thing with IBM, their codernauts want to lock you in a long-term mainframe service plan along with their biased consulting expertise.

You can’t be all things to all people and pretend you have your customer interests at heart.

Of course what I don’t say is that a merger would put me in a position where I would have to report to someone, and when you’re a CEO this is like a total demotion. We all have egos, don’t we? I would rather retire, go back to Pembroke and grow a subsidized product like pigs or corn.

But I have to admit, I’d like to have offers on the table for CGI. Just for the pleasure of being considered and then politely say no. Or yes. But no one calls. Is it because we’re so heavily in the Canadian market which is considered a niche from the U.S. perspective, or is it because we’re a prized jewel whose value puts us above the rest? I’d like to think the latter, but I have my share of doubts like everyone else.

One less competitor?

Says here that I told the press that Dell buying Perot was a good thing because it eliminates a competitor. Serge kindly reminded me after the event that our competitor still exists, Dell will not convert Perot into a laptop manufacturing business. Oops. Maybe I got too carried away. I mean, I hope the Dell/Perot alliance will bear as much fruits as AOL/Time Warner and General Motors/Saab if you know what I mean.