Round Rock Texas-based PC maker Dell Inc. (DELL) recently confirmed an information technology (IT) support deal with Hyatt Corp., an affiliate of Hyatt Hotels Corp. (H). The contract has a tenure of five years, but no financial details of it were disclosed.
Under the deal, Dell’s Services segment will provide extensive IT services and support to Hyatt, enabling the renowned hospitality service provider to better manage its business and deliver improved services to its boarders.
Dell will provide Hyatt with its Service Desk Support, Corporate Support Services, Network and Server Support Services, Asset and Inventory Management Services and Project Services. Dell’s services will circle around Hyatt’s corporate locations and North American properties.
Winning deals is a frequent affair for Dell. We believe that Dell’s services are in demand and will drive revenues in the coming quarters.
Earlier this month, Dell provided extensive hardware and software support to the Nuclear Regulatory Commission through its subsidiary Perot Systems’ Government Services. In March, Dell clinched a six-year IT outsourcing deal with TUI Travel plc, a company under TUI AG, a renowned European travel group.
In February, Dell signed a seven-year deal with the Brooklyn Hospital Center (“TBHC”), under which the PC maker agreed to provide its revenue cycle services to the latter. These services will help TBHC in billing and payer reimbursement functions, thereby ensuring patient satisfaction.
During the recently concluded first quarter of 2012, Dell recorded a 5% year-over-year growth in its Service segment. The Services portfolio was strengthened by acquisitions of information-security services provider SecureWorks Inc., cloud-based service provider Boomi and cloud-based medical archiving solutions provider Insite One Inc.
Apart from Dell’s deal wins and acquisitions, we remain encouraged by its efforts to shift focus from the traditional PC business to the higher-end data storage market or cloud computing. However, concerns include soft demand at the Consumer segment, a high debt level and stiff competition from technology majors such as Hewlett-Packard Co. (HPQ), Apple Inc. (AAPL), International Business Machines Corp. (IBM) and Microsoft Corp. (MSFT).
Currently, Dell has a Zacks #2 Rank, which equates to a short-term Buy recommendation.
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