Dell, Slipping To Second Place, Adds Perot's IT Services

How big an asset is being an established tech brand? Apparently, in a sector where "the role of brand is falling," according to Interbrand, it doesn’t necessarily mean you’re in great shape.

Dell, one of many brands suffering a drop in value over last year, is 35 on Interbrand's Best Global Brands 2009 rankings, but dropped 12% in Brand Value, and is no longer the go-to personal computing company. (That would now be HP.) The annual report blames Dell’s "failure to fully adopt netbooks as a flagship product in timely manner."

But Interbrand also points to "Dell’s track record of successful branding and efforts to cater more directly to needs of customers," praise vindicated by Dell's announcement yesterday of its acquisition of Perot Systems, an IT services provider with deep roots in electronic health records, a potential beneficiary of healthcare reform.

HP’s purchase last year of EDS, another tech-services provider (like Perot Systems, founded by former presidential candidate Ross Perot) showed innovation by the new top brand. The Dell deal for a major tech services branch is a similar instance of tech companies "moving beyond their original domain, looking for new opportunities to branch out into the interconnected technology fields."

Dell spent a spent a huge premium—$3.9 billion, much more than Perot Systems is actually worth—to move some of its eggs out of the computer-hardware basket, but with the exception of a ranting financial-advice personality, the move was generally applauded for its long-term prospects for the brand.

The lesson Dell seems to have learned—especially in order to compete with HP and IBM—is that brands in a sector known for innovative products must learn to be innovative brands themselves, and have to follow the path Interbrand calls “not evolution but radical change.”