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Dell, EDS team up in services quest

The PC maker and the services giant are working together to land computer-services deals at a time when most consulting players are falling behind.

Professional-services giant Electronic Data Systems on Monday said it is working with Dell Computer to land computer-services deals at a time when most consulting players are falling behind amid the overall economic slowdown.

EDS and Dell, which have partnered in the past, said they expect this alliance to generate more than $500 million in sales over the next five years.

Under the agreement, Dell will sell its computer systems bundled with EDS services such as desktop support, hardware maintenance and systems management. In turn, EDS intends to expand its use of Dell PowerEdge servers and desktop products to clients who want Dell-based Web-hosting and desktop-management service offerings.

The companies are charging clients a monthly fee for the combination of EDS services and Dell products. Additional services, such as training, remote server monitoring and consulting, are also available.

EDS is on a roll, winning a steady stream of new services deals while many other players in the consulting and services arena continue to fall by the wayside. Many of the small Net-consulting upstarts that focused on delivering niche services, such as Web development and design, have been stumbling while larger, traditional firms gain ground and nab more and bigger business clients.

Just last month, the Plano, Texas-based company met analysts' estimates in its first quarter on slightly higher-than-expected revenue and told analysts to stick to their second-quarter earnings forecasts. Rival IBM Global Services, another sizable old-timer in the consulting field, also enjoyed a healthy quarter with steady growth to come in its services arm.

As part of the deal with Dell, the companies also announced a prepackaged service aimed at small to medium-size businesses, or companies that have between 1,000 and 10,000 employees. Those clients would get a bundled offering that includes EDS computer services along with Dell products such as Latitude notebooks, OptiPlex desktop computer systems and Precision workstation products.

Dell and EDS already have a model in place to support customers who are interested in the all-inclusive offering. Dell has been working with EDS as a member of its team that won last year's high-profile $6.9 billion bid to upgrade computer systems for the U.S. Navy and Marine Corps.

Under the contract, Dell is supplying the servers, workstations, desktops and notebooks for some 350,000 Navy personnel. Dell is part of the EDS-led team that also includes Cisco Systems, Microsoft, Raytheon and others.