Talk about an adrenaline rush. A leading hardware provider joins forces with a top federal services company — all within the span of six weeks. The result: Dell Services Federal Government. That move is helping Lee Carrick, and the team he leads, deliver on a bold new vision for the newly restructured federal business unit: bringing more technology offerings and capabilities to government customers.
Carrick’s excited about that vision. You can sense as much as he settles into a conference room one recent afternoon at the company’s Fairfax, Va.-based offices. “The things we wanted to expand within government services, we now have that capability, and more, with Dell,” said Carrick, who most recently served as President of Perot Systems Government Services. Since the Dell acquisition in September 2009, he’s taken on a new role: Vice President of Dell Services Federal Government. This isn’t just any title switch, though. Far from it.
New market thinking
In many ways, Dell’s acquisition of Perot Systems for $3.9 billion this past fall speaks to a historic shift underway in the IT services industry. Over the past two years, several major hardware providers —HP, Xerox, and, of course, Dell — have sought to enlarge their services footprint to increase their abilities to serve government and commercial customers.
By and large, industry analysts are calling it a favorable turn.
“The two biggest market drivers now are the need to lower costs and to meet heightened service-level expectations [of government customers],” said Thom Rubel, vice president of the Falls Church, Va.-based research group, IDC Government Insights.
Hardware-services alliances are proving the natural next step. “I think these moves make sense … they hold potential for government both from a cost and an agility perspective,” said Rubel. “It’s definitely a turning point that reflects new thinking in the market.”
New thinking, indeed — and something Carrick, a 26-year industry veteran, echoes. “I’ve worked in other large companies where we did large acquisitions, but they were kind of buying more of the same,” he said.
“For me, personally this is the most significant shift.”
That shift comes at a pivotal time for government customers. “Dollars are always tight in the federal budget, that’s especially true now,” said Carrick, whose customers include NASA, the Intelligence Community, and Department of Defense. “So, how can they minimize IT services and infrastructure costs, while still meeting demands? How can they be more efficient?”
Carrick’s got a few ideas.
New Capabilities
Applications, business process services, consulting, infrastructure, and support — they’re among the tools in a comprehensive portfolio that the federal unit now provides in its push to become the major outsourcing and managed services provider.
“With Dell, we can now scale up from consulting, to deploying a small infusion of technology systems, to completely outsourcing the systems, software, and people to help support customers’ mission goals,” said Carrick. Also on tap: Green IT. And cloud computing. “We’ve now got much more breadth to expand our cloud computing offerings, to offer public and private clouds,” said Carrick. Then there’s the issue of the day: cybersecurity. “That’s an area that we know our customers need more of … We’ve got a federal team focused on growing our cybersecurity practice and bringing more of the Dell capability to our federal clients,” he said. “That’s huge for us.”
Ditto for healthcare. Recently, Gartner ranked Dell the number one healthcare information technology services provider in the world. Pretty good timing, particularly as the federal government’s $20 billion HITECH stimulus program continues to generate sizable demand for health IT products and services.
Carrick’s team — more than 3,200 employees, spread across 46 states — is moving into position. “We’re looking at, ‘How do we, together [Dell and Perot], expand into the global healthcare market, and, specifically, for the federal services unit, within the federal healthcare market,” said Carrick. A main focus is, of course, leveraging electronic medical records in the wake of the national healthcare reform bill. “We’re pushing that very hard,” he said.
The unit is reportedly doing the same in education. Recently, Dell was ranked second for computer hardware support in the market. “Dell brought in a K-12 strength, Perot a federal government education strength,” said Carrick. “Through an integrated suite of tools, from electronic white boards to netbooks, we’re looking to expand next-generation classrooms.”
Navigating Change
By many accounts, the Dell acquisition is a complementary fit — a “close alignment of culture and focus,” said Carrick. That’s reflected in the leadership roster: legacy Perot and Dell leaders working together, at the highest levels. Most notably, this includes Peter Altabef, former Perot Systems CEO, who now heads Dell Services.
Still, as with any acquisition, potential pitfalls are a consideration. “They [Dell Services Federal Government] have to keep an eye on both traditional relationships as a service provider, as well as on modernizing offerings according to what the government needs next,” said analyst Rubel. “They have to stay on top of both fronts to be a ground-breaking organization.”
Being that “ground-breaking” organization takes intelligence. And communication. Lots of it.
“That’s the big one for me — communication,” said Carrick. “Communication is why we’ve gotten as far as we have. We just have to keep doing that.”
On the external front, Carrick has been delivering this message: Nothing has stopped, the federal business has simply expanded. “As we engage with each of our customers, and talk about our current contracts, we’re now presenting what else we can do for them as a single integrated company,” he said.
In meetings with government program managers, Carrick has also been letting them know: Dell Services is “platform agnostic,” as he puts it. “Quite often, the federal government will do a buy of services, and a separate buy of hardware,” said Carrick. “We’re happy to support whatever they’re doing.”
Internally, Carrick has worked to bring Dell and legacy Perot managers onto the same page as well. “He’s been successful in making sure that, number one, everyone has all the information they need to move forward,” said Eric Wieman, general manager of Dell Services’ federal civilian division. “That’s resulted in a high level of trust,” he adds.
And performance. “Immediately, upon acquisition, and then into integration, the challenge was identifying all of the capabilities and then putting them together in a structured fashion from your sales team to your customers,” said Max Peterson, area vice president for federal civilian agencies and intelligence sales for Dell Federal. Carrick’s leadership was instrumental in helping move a new breadth of capabilities forward —faster, in some cases, than the overall integration plan anticipated, said Peterson.
“Through our acquisition, Dell now has cloud offerings that we deliver for services on a pretty significant shirttail … we also run more than 30 different data centers on an outsourced, managed basis,” said Peterson. “Lee [Carrick] and his leadership team were a big help in that.”
Looking Ahead
Solid benchmarks have been the mainstay, so far. Now comes the next set of goals: to continue high levels of service, and to increase it. Carrick has his eye on both.
Recent contract wins point in that direction. Among them: a five-year contract to provide IT services to the U.S. Army; a 10-year IT services contract to support the Department of Transportation’s Common Operating Environment; and a three-year contract to provide resources to help the U.S. Citizenship and Immigration Services (USCIS) Field Office Support Services simplify its operations.
Continuing that growth means thinking ahead. And sticking to a winning formula: communication. “We need to continue to be clear and candid about our delivery successes and challenges, so that we can put remediation plans in place,” said Carrick. “We need,” he added, “to communicate and come up with new solutions … we need to solve problems and be open internally.”
Open is the operative word. Which, by the looks of it, Carrick is helping foster within the federal unit. Spend an hour with him, and you get the impression: He’s just a nice guy. When asked how he balances niceness with leadership, Carrick smiles. The niceness, he credits to his wife of 30 years; the leadership, in large part, to the 15 years he spent in the U.S. Air Force.
“Being an Air Force officer was a tremendous training ground,” he said.
His team is betting on that leadership. “Lee Carrick is exactly the right guy, in exactly the right place, at the right time,” said Wieman.
So, what’s ahead? Carrick surveys the scene, past and future. “I would like to believe that Perot Systems Government Services was a key player in where we are today,” he said. “I think we did a really great job in certain key areas.” Being with Dell has only raised that game, he added.
“Dell has opened doors for us as an entity,” said Carrick, “and I think we’ve helped Dell open some doors — it doesn’t get much better than that.”
